Blackstone buys StarHub Green for $210m

Business Times: Fri, May 04

US-BASED private equity giant Blackstone Group is said to have made its first major property acquisition in Singapore. It has bought StarHub Green along Ubi Avenue 1 for $210 million from German fund manager SEB. The building, near MacPherson MRT Station, comprises two towers (six and seven storeys) and is on a site with a remaining lease of about 45 years. The plot is zoned for Business 1 use and its current gross floor area is built up to the maximum 2.5 plot ratio allowed for the site under Master Plan 2008. StarHub Green has 470 car park lots. The pricing is said to reflect a net yield in the 5-6 per cent range and works out to about $500-550 per square foot on net lettable area (NLA). The lower psf price is based on the building's maximum NLA of around 421,000 sq ft assuming there is one occupier per floor. More than 90 per cent of the building is let. Boustead was the original developer for the project, which it built on a site clinched at a state tender in 1997. It later sold the completed project to SEB. StarHub occupies slightly over half of the space in the building. Other tenants include Unisteel Technology, Quest Laboratories, Boustead Singapore and Cherie Hearts, which runs a child care centre in the premises. The sale of StarHub Green is understood to have been brokered through a private treaty deal handled by Colliers International. StarHub Green is on a site with a 60-year leasehold tenure starting March 1997. Another recent industrial property transaction was the $19.1 million sale of a nine-storey freehold property at 50 MacPherson Road. The building - formerly known as Three Rifles Building - was sold by the family of the late Jusuf Merukh of Indonesia. The buyer is said to be a Singaporean investor. The price works out to about $650 psf based on NLA of around 30,000 sq ft. The deal is said to have been brokered by Jones Lang LaSalle. Incidentally, talk in the market is that Park Regis Investments - whose shareholders include Mr Merukh and BVI-registered Great Fortune Capital Pte Ltd - could soon put the Park Regis Singapore hotel up for sale again. The property is at New Market Street-Merchant Road. This comes after CTC Tourism Holdings, the owner of travel agency CTC Travel and which had inked a deal to buy the property in October last year, did not complete the transaction. That deal valued the property at $270 million. The property, on a site with a remaining lease of about 95 years, comprises the 203-room hotel and a seven-storey office block with about 42,000 sq ft NLA. At the time of the deal last year, market watchers said that assuming the offices were valued at $2,000 psf, the valuation for the hotel would be $916,000 per room. The deal inked with CTC followed an expression of interest exercise. CTC's price was said to be significantly higher than the next highest offer, thought to be about $240 million. This reflects about $760,000 per room based on the $2,000 psf valuation for the offices. Separately, mainboard-listed property giant City Developments Ltd's office development at 7&9 Tampines Grande is being marketed for private treaty sale by JLL and CBRE, BT understands. The price indication for the BCA Green Mark Platinum office development is said to be $400 million ($1,400 psf on NLA) and above. The building has about 287,000 sq ft NLA. It is said to be about 95 per cent let. Hitachi, Manulife and BNP are among the tenants. The building comprises two eight-storey towers. It also includes 147 basement carpark lots. CDL developed the project on a 99-year leasehold site that it clinched at a state tender that closed in May 2007. The development, which was completed in 2009, was the winner in the Sustainable Development category at the FIABCI Prix d'Excellence Awards 2011. Another property, 700 Beach Road, is also expected to be put on the market soon with a price expectation of about $115 million or $1,650 psf. The eight-storey office block's NLA of about 70,000 sq ft is fully leased. The property is being sold by Fine Grain Property Consortium (Singapore) Pte Ltd and renowned international interior design firm Hirsch Bedner Associates. It is on a site with a 99-year leasehold tenure starting April 2004. Potential investors are expected to look at the building's redevelopment potential as well as its current use. JLL is said to be the marketing agent. Meanwhile, Wing Tai and CDL are said to be nearing a deal to sell their 66 strata office units at Burlington Square along Bencoolen Street for about $100 million. Burlington Square is on a site with a balance lease of about 83 years. Source: Business Time