ASCENDAS Real Estate Investment Trust (A-Reit) has emerged as the buyer of Creative Technology’s headquarters building at 31 International Business Park in Jurong East. The price will be $246.8 million.

Creative said in March that it had agreed to sell and lease back the property but did not disclose the buyer’s identity. The deal is subject to approval by Creative shareholders and JTC Corp.

On completion of the sale, a Creative subsidiary will lease the property for five years, with options to renew for a further three plus two years.

A-Reit’s manager said the average yield for the initial five-year lease will be 6.24 per cent. Additional rent is payable in the third and fifth years of the lease if the cumulative increase in Singapore’s Consumer Price Index exceeds 5 per cent.

Had A-Reit bought, held and operated the property since the start of the current financial year, the proposed acquisition would have boosted its distributable income per unit by 0.07 cent.

A-Reit’s manager will receive a $2.5 million acquisition fee. Other transaction costs are estimated at $3.7 million.

The property, valued by CB Richard Ellis at $246.8 million, is a part five-storey, part seven-storey and part eight-storey tower with basement parking.

It has an auditorium and a 2,000-capacity outdoor amphitheatre and is on a 265,739-sq-ft site with 30 + 30 year leasehold tenure from Dec 16, 1994.

A-Reit plans to fund the acquisition by debt and/or equity. On the stock market yesterday, the counter ended 14 cents lower at $2.50.

Source : Business Times - 10 May 2008

Ascendas Real Estate Investment Trust (A-REIT) is buying a business park building in Jurong for S$246.8 million.

The property at 31 International Business Park is currently owned by multimedia firm Creative Technology.

It has a gross floor area of about 62,000 square metres and a net lettable area of some 50,000 square metres.

It includes three office towers, an auditorium and a 2,000-capacity outdoor amphitheatre.

The site has another 16 years left to its 30-year lease, but this could be extended for another 30 years.

A-REIT said the proposed acquisition, to be funded by debt or equity, is in line with its strategy of enhancing its portfolio over time. - CNA/ms

Source : Channel NewsAsia - 9 May 2008

HSBC Bank is extending the lease of its headquarters at Collyer Quay for another seven years after it expires in April 2012.

It will pay $143.1 million to rent HSBC Building until April 2019, said the building’s owner, CapitaCommercial Trust (CCT), yesterday.

CCT will spend up to $7 million on improvement works at HSBC Building. These are expected to start late this year, subject to approval.

CCT said in a statement that the forward renewal of this lease agreement ‘will ensure that HSBC continues to be one of CCT’s core blue chip tenants and provides long-term sustainable and stable income to CCT’.

The deal will ‘also ensure that HSBC Building will continue to enjoy 100 per cent occupancy over the long term’, in light of the fact that more office space will come onto the market after 2010.

About 1.11 million sq m of office space is expected to be completed between 2010 and 2012, according to the Urban Redevelopment Authority. Until then, the shortage of office space is likely to remain.

HSBC subsidiary, HSBC Institutional Trust Services, is a trustee of CCT and is considered an ‘interested person’ in this transaction, CCT said in its statement.

It also said property firm CB Richard Ellis has reviewed the lease agreement as an independent valuer and has confirmed that the rent is at market level.

Source : Straits Times - 8 May 2008

REAL estate fund management company ARA Asset Management, which was listed on the mainboard late last year, saw net profit soar 137 per cent to $9.2 million in the first quarter ended March 31, 2008.

Total revenue jumped 107 per cent to $17.5 million from $8.5 million a year earlier, mainly on higher management fees from an enlarged Reit portfolio, an increase in net property income for Reits it manages, and portfolio management fees from ARA Asia Dragon Fund (ADF).

Net margin was 53 per cent, up from 46 per cent the year before.

‘We are pleased to report a good set of results,’ said ARA chief executive John Lim. ‘The results are testament to the stability of our income, which together with our strong balance sheet, puts us in a good position to capitalise on any opportunities that may arise amid the current uncertainty in financial markets.’

ARA reported a 108 per cent increase in Q1 earnings per share to 1.58 cents, from 0.76 cents.

Cash and cash equivalents totalled $91.8 million at March 31- a sharp rise from $14 million a year earlier. Total assets under management  stood at $10.4 billion on March 31.

Source : Business Times - 8 May 2008

ARA Asset Management has posted first-quarter earnings of S$9.2 million, up 137 percent from a year ago.

Revenue more than doubled to S$17.5 million.

The growth was mainly due to higher management fees from its REIT portfolio, as well as higher net property income.

ARA is expecting its asset enhancement initiatives to boost income for the full year of 2008. It is looking to set up REITs in new asset classes.

As at March 31, ARA’s total assets under management stood at S$10.4 billion. - CNA/ms

Source : Channel NewsAsia - 7 May 2008

Singapore-listed Allco Commercial Real Estate Investment Trust said on Wednesday that it has appointed sales agents to sell its 50 per cent interests in two Australian properties.

The company said in a statement that it had acquired the two properties for $371.1 million (US$272.4 million). — REUTERS

Source : Business Times - 7 May 2008

Allco Commercial REIT said on Wednesday it is putting its stakes in two properties in Australia up for sale and has appointed sales agents for these properties.

The properties are Central Park in Perth and Centrelink Headquarters in Canberra. Together, they are valued at around A$483 million or S$624 million.

CB Richard Ellis and Jones Lang LaSalle (JLL) will sell Allco’s 50 percent interest in Central Park through an international Expressions of Interest campaign which closes on July 10.

JLL and Colliers International have been appointed to market each of Allco REIT’s and Record Realty’s 50 percent interest in Centrelink Headquarters through an international Expression of Interest campaign which closes on June 5.

Central Park is a premium grade office tower and the tallest building in Perth. The property comprises a 47-storey office tower, with a total net lettable area of about 716,000 square feet.

Centrelink Headquarters is a new five-storey Grade A office complex. The property is located within the core of the Tuggeranong Town Centre, one of four town centres within the Australian capital Canberra.

Allco had said that the capital will be redeployed to higher-growth areas in Singapore and Asia. The funds could also be used to repay debts. - CNA/ms

Source : Channel NewsAsia - 7 May 2008

WE refer to Denis Distant’s letter, ‘K-Reit Asia rights issue - why so slow?’ (BT, May 6, 2008).

K-Reit Asia’s closing date for application of rights units was April 25, 2008. The period between this date and May 8, the listing date of the rights units, was necessary to allow for smooth processing of the rights issue.

This involves adherence to a set of procedures including the validation of the acceptance of rights entitlements and application for excess rights units, transfer of subscription monies as well as allotment, crediting and issue of the rights units.

The manager of K-Reit Asia has nevertheless worked closely with the relevant parties to expedite the process, and the results of the rights issue were announced on May 5, 2008.

We understand that Olam International did a preferential offering while K-Reit Asia’s exercise was a renounceable rights issue for which more time must be allowed so that unitholders have the opportunity to trade their ‘nil-paid’ rights entitlements on SGX-ST.

We wish to thank Mr Distant for his feedback.

Choo Chin Teck
Joint company secretary, K-Reit Asia Management Limited

Source : Business Times - 7 May 2008

Mainboard-listed Parkway Life REIT has booked a distributable income of S$9.8 million for the first quarter.

That works out to a distribution per unit (DPU) of 1.62 cents.

All in, gross revenue hit S$11.9m on the back of sustained demand for private healthcare.

The REIT’s portfolio includes Mount Elizabeth Hospital, Gleneagles Hospital and East Shore Hospital. - CNA/ir

Source : Channel NewsAsia - 6 May 2008

THE final payment date for the ongoing KReit Asia rights issue was April 25, but applicants will have to wait until May 8 to know the outcome of their applications for excess units.

Why does it take almost two weeks to announce the results of the rights issue? Surely the outcome could be published within a few days. KReit Asia would do well to ask the managers of its rights issue to refer to their counterparts who handled the recent rights issue of Olam International, which completed the entire exercise in a much shorter time.

Denis Distant, Singapore

Source : Business Times - 6 May 2008