Guthrie bags 2HR; deal values Havelock building at $283m

20130305-bt-guthrie-bags-2hr-pic GUTHRIE has picked up 2HR at 2 Havelock Road in a deal that values the asset at $282.88 million, or $1,626 per square foot, based on its current net lettable area (NLA) of 173,912 sq ft.

The seven-storey commercial building is on a site with a remaining lease of about 69 years.

It has 36,992 sq ft of retail NLA on the lower levels (including basement) and 136,920 sq ft of offices above that. It has 95 basement carpark lots.

Market watchers reckon that given Guthrie's experience in the retail property business, it can be expected to convert some of the lower-level office space into retail space, which typically commands higher rents.

When contacted, Guthrie GTS executive director Michael Leong highlighted 2HR's attractive location in the Chinatown area, which he said has "great potential".

The building is a stone's throw away from Clarke Quay MRT station, in addition to being about 280 metres from the future Chinatown MRT station on the Downtown Line.

Diagonally opposite 2HR, the spanking new Parkroyal on Pickering hotel opened its doors a few months ago, as did the revamped Chinatown Point mall after a spruce-up costing more than $90 million.

Guthrie is acquiring 2HR through shares in the company that owns the asset. The shares are being sold by US-based property fund group AEW.

Based on the current average monthly rental of about $6 per square foot being paid by tenants in the building, the net yield on the $282.88 million price works out to about 3.2 per cent.

Major tenants include Estee Lauder (which occupies about 48,000 sq ft), DSM Nutritional Products, MOL Tankship Management and insurance broker Willis (Singapore).

2HR was sold through a private treaty deal. CBRE sourced the buyer and will split the commission with Jones Lang LaSalle, with whom it was jointly appointed as exclusive marketing agents by AEW.

AEW acquired the property, formerly known as Apollo Centre, for $205 million in 2007 and completed an extensive refurbishment two years later.

The building has a land area of 54,560 sq ft and the site is zoned for commercial use. Outline approval has been secured to redevelop the property into a 12-storey hotel.

2HR is the last of AEW's major property assets in Singapore. Last year, it sold three assets - Murray Terrace, Robinson Point and four adjoining three-storey shophouses in Amoy Street.

Murray Terrace - an award-winning row of 14 conserved shophouses just off Maxwell Road - was sold for $75 million to Satinder Garcha of Elevation group. Robinson Point, a 21-storey freehold office tower, was sold for $284 million or $2,132 psf on existing NLA to Sun Venture. AEW received nearly $33 million for the Amoy Street shophouses.

Source: Business Times, 5 Mar 2013