Deka buys $545.5m Chevron House from Goldman Sachs

November 17, 2010 

Germany’s Deka Immobilien has bought a Singapore office tower for about US$420 million ($545.5 million), broker Savills said on Tuesday, in a deal that crystallises a hefty loss on the price paid by owner Goldman Sachs in 2007.

“The transaction reflects a 30% discount from the peak pricing of 2007 and prime rental levels remain approximately 50% below their peak in 2007,” said Craig Ward, a director at global consultant Savills, which advised fund manager Deka.

A Goldman-linked property fund had bought Chevron House from Singaporean developer CapitaLand in September 2007, at a then-record price of $2,780 per square foot, or $730 million in total, local newspapers reported.

Savills said Deka, which bought the 262,650 square feet property at an initial yield of 4%, sees strong potential for rental growth and asset enhancements for the 29-storey tower located in Singapore’s Central Business District.

The consultancy said a number of other investors, in addition to Deka, are seeking assets in Singapore ranging from $50 million to $500 million, drawn by the city-state’s strong economic growth and recovery in its office market.

Singapore’s Prime Minister Lee Hsien Loong told Reuters in an interview earlier this month the city-state’s red-hot property market was a matter of concern and needed careful monitoring to avoid the creation of a bubble.

Goldman real estate funds have been offloading assets in Asia so far this year, and in August sold two other Singapore office blocks for $870.5 million to Overseas Union Enterprise, a firm controlled by Indonesia’s Lippo Group.

Source : The Edge – 16 Nov 2010

S’pore office rents post highest rise since end-2007

 November 18, 2010 

Office rents in Singapore posted their biggest jump since the end of 2007 in the third quarter, led by increasing demand from financial institutions, insurance firms and professional business services companies.

According to property consultants CB Richard Ellis (CBRE), prime rents in Singapore climbed 7.2 per cent from the previous three-month period, to S$7.40 per square foot per month.

Major leasing deals in Singapore reported during the period primarily focused on new Grade A developments.

Vacancy in Grade A offices fell due to a net absorption of 1.2 million square feet, the largest since 2000, said CBRE.

Led by Singapore and Greater China, overall office rents in Asia rose 3.2 per cent quarter-on-quarter in the third quarter, making it the second straight quarter of growth and confirming the recovery of office demand in the region.

Demand for quality space arising from relocation or expansion of businesses grew noticeably, a trend that manifested itself in the decline in vacancy in new office buildings in selected markets across the region.

Going forward, CBRE said continued economic recovery in Asia suggests office demand is grounded more solidly here, as compared with other regions.

Source : Channel NewsAsia – 18 Nov 2010

Office rents surge in Q3

November 19, 2010 

Office rents in Singapore posted their biggest jump in the third quarter since the end of 2007, led by increasing demand from financial institutions, insurance firms and professional business-services companies.

According to property consultancy CB Richard Ellis, prime rents in Singapore climbed 7.2 per cent from the previous three-month period, to $7.40 per sq ft per month.

Major leasing deals in Singapore reported during the period focused primarily on new Grade A developments.

Vacancy in these Grade A buildings fell due to a net absorption of approximately 1.2 million sq ft, the largest since 2000, CBRE said.

Led by Singapore and Greater China, overall office rents in Asia rose 3.2 per from the previous three months, making it the second straight quarter of growth and confirming the recovery of office demand in the region.

Demand for quality space arising from relocation or expansion of businesses grew noticeably, a trend that manifested itself in the decline in vacancies in new office buildings in selected markets across the region.

Continued economic recovery in Asia suggests office demand is grounded more solidly here, as compared with other regions, CBRE said.

Source : Today – 19 Nov 2010