Saturday, April 6, 2013

CDL puts 60 Sunshine Plaza units on market

The Business Times  |  05 April 2013
It aims to fetch above $1,900 psf for the units on an individual basis

City Developments Limited (CDL) is said to have put all its 60 strata office units at Sunshine Plaza in the Middle Road area on the market.

BT understands the property giant is looking to sell the units on an individual basis at above $1,900 per square foot.

The units are currently leased and based on a price of $1,900 psf, the gross yield could be a tad above 3.5 per cent.

Ranging from 484 sq ft to 1,345 sq ft, the units are located on the second to sixth levels, and on the eighth to 12 levels. CDL had earlier sold the entire seventh floor.

Sunshine Plaza is on a site with about 83 years lease left and bounded by four roads - Middle Road, Bencoolen Street, Prinsep Street and Prinsep Link.

The development, completed in 2001, also has apartments and shops, which CDL sold off earlier.

For the office units, the group is said to have appointed DTZ as the sole marketing agent for sale by private treaty.

It is thought that CDL put its Sunshine Plaza office units on the market on an individual basis after receiving unsolicited interest for an en bloc sale of all 60 units.

Market watchers say CDL's decision makes sense since it would reap a higher per square foot price from divesting the units individually than in a bulk-sale to another party, which would then stand to cream a profit from reselling them individually.

In May last year, a CDL-Wing Tai joint venture sold all 66 office units at Burlington Square, also along Bencoolen Street, to a Guthrie-Sun Venture tie-up for $89.3 million or $1,318 psf.

The duo have since resold close to 50 of these units at an average price exceeding $1,800 psf, BT understands.

The 66 office units are between 549 sq ft and 1,066 sq ft. Burlington Square is on a site with about 82 years of lease remaining.

Meanwhile, CDL's just-released annual report for the financial year ended Dec 31, 2012 shows that its executive chairman Kwek Leng Beng and his brother Leng Joo, the group's managing director, have taken a cut in their remuneration for FY 2012.

The group posted a 15.1 per cent drop in full-year net profit to $678.3 million last year.
Revenue, however, grew 2.2 per cent to a record $3.35 billion in 2012.

For the fourth quarter of last year, CDL posted a 52.8 per cent year-on-year increase in net profit to $249.3 million on the back of a 22.8 per cent rise in revenue to $886.4 million.

CDL's 2012 annual report lists Mr Kwek Leng Beng's remuneration in the "above $8.75 million and up to $9 million" band. Both ends are $750,000 lower than the "above 9.5 million and up to $9.75 million" range for his remuneration for FY2011.

His brother Leng Joo has been paid "above $7.5 million and up to $7.75 million" for FY2012.
Both ends of this range are $500,000 below the "above $8 million and up to $8.25 million" band for his 2011 package.

His FY2012 remuneration comprised 15 per cent in base salary, 83 per cent in variable bonuses/allowances, and one per cent each in board/committee fees and other benefits.

For the chairman's FY2012 remuneration, these components accounted for 13, 80, 6 and one per cent, respectively.

In the stock market yesterday, CDL closed five cents lower at $11.21.

Martin Koh | 86666 944 | R020968Z
Sherry Tang | 9844 4400 | R020241C

Senior Sales Director
DTZ Property Network Pte Ltd (L3007960A)

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