Wednesday, July 18, 2012

NTUC Income ups stake in Parkway Parade

Straits Times: Wed, Jul 18

INSURER NTUC Income has increased its stake in Parkway Parade, making it the largest investor in the popular shopping mall in the east.

It lifted its stake from 22 per cent to 46 per cent in the real estate fund Parkway Parade Partnership (PPP) which owns Parkway Parade, a release yesterday said.

NTUC Income and PGGM Private Real Estate Fund (PGGM), an investment vehicle for Dutch pension funds, are cornerstone investors of PPP.

While NTUC Income has raised its stake, PGGM has kept its stake at 33 per cent. Given that Parkway Parade is valued at more than $1 billion, a back of the envelope calculation means that NTUC Income has invested about an additional $200 million in the fund.

Parkway Parade is the largest shopping centre in the eastern part of Singapore. The six-storey building has 562,611 sq ft of net lettable space, which is almost 100 per cent leased, giving the owners a regular income stream.

It is popular with families and enjoys a good tenant profile that includes Isetan, Giant, Cold Storage and Marks and Spencer.

Mr Peter Heng, NTUC Income's senior vice-president and chief investment officer, said: 'NTUC Income has been actively diversifying our investment portfolio over the last five years and our appetite has increased for real estate investments with a track record of strong income yields.

'Parkway Parade is a great example of the kind of commercial property asset that is going to provide a stable cash return over the long term.'

Real estate management group Lend Lease will continue to serve as PPP's investment manager and the property manager for Parkway Parade.

Mr Heng added: 'Working with our co-investors and property manager, we will embark on a variety of asset enhancement initiatives to further enhance Parkway Parade's appeal to tenants and customers and increase its rental yield and asset value over time.'

PPP has delivered to its shareholders about 18 per cent a year of returns since its inception.

NTUC Income owns or has stakes in other office buildings and malls such as 16 Collyer Quay and Eastpoint Mall.

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