Thursday, January 3, 2013

Income to fully own 16 Collyer Quay


Business Times
Jan 03, 2013

NTUC Income will be taking full ownership of 16 Collyer Quay, a prime office building in the Central Business District (CBD) area.

It has inked a sales-and-purchase agreement with Goldman Sachs, and the deal is scheduled for completion at the end of January, Income said yesterday.

In January last year, Income paid $101 million to Goldman for a 49 per cent stake in Savu Investments, the holding company that owns the asset. At the time, 16 Collyer Quay was valued at $626 million, or $2,250 per square foot (psf).

Last Friday, BT reported that Income was believed to be making a deal with Goldman for the remaining 51 per cent.

Market watchers said the sale of Goldman's remaining stake marked the divestment of its last major real estate asset in Singapore.

Goldman bought the 37-storey, 999-year leasehold building, formerly known as Hitachi Tower, for $811 million in early 2008.

Under the current transaction, the building is valued at $660 million, or less than $2,400 psf. Based on this valuation, it is believed that Income would be paying about $336.6 million for the 51 per cent stake, giving it full control of 16 Collyer Quay.

The building, with a net lettable space of 278,356 sq ft, is 94 per cent occupied. It has stable rental income from a diverse mix of office and retail tenants. Income plans to renovate the building to increase its asset value and attract office tenants.

Said Peter Heng, Income senior vice-president and chief investment officer: "16 Collyer Quay is part of our long-term strategy to allocate more of our investments to alternative investments, including real estate with a track record of strong income yields.

"Over the last five years, we have successfully diversified our portfolio to ensure stable, resilient and higher returns for our policyholders."

Income also owns, fully or partially, a number of other commercial properties, including NTUC Income Centre, Capital Square, Prinsep House, Parkway Parade, Ang Mo Kio Hub, EastPoint Mall and Clementi Mall.

The deal is a proprietary one between Goldman and Income.

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