Sun Venture-LKH tie-up buying Westgate Tower

A CONSORTIUM comprising Sun Venture Homes and Low Keng Huat (Singapore) has been granted an option to buy the Westgate Tower in Jurong Gateway from CapitaLand, CapitaMalls Asia and CapitaMall Trust for $579.4 million. This works out to about $1,900 per square foot based on the 99-year leasehold office tower's net saleable area of 304,963 sq ft.

Alvin Teo, managing director of the Sun Venture Group, which will be taking a 60 per cent stake in the consortium making the purchase, told BT last night that the plan is to hold the asset long term for rental income. A marketing agent will be appointed in the coming weeks to help find tenants for the 20-storey office tower, which is slated to receive Temporary Occupation Permit by year end.

The 60:40 tie-up between Sun Venture Homes and Low Keng Huat has up to Jan 24 to exercise the purchase option. The consortium is making the purchase through two special purpose vehicles, Westgate Commercial Pte Ltd and Westgate Tower Pte Ltd. A 5 per cent option deposit has been paid.

Located next to Jurong East MRT Station, Westgate Tower is the office component of the Westgate integrated development which also includes the Westgate shopping mall.

The seven-storey mall opened on Dec 2 last year, with more than 250 stores from Basement 2 to Level 5, over a net lettable area of about 410,000 sq ft.

CapitaLand owns a 20 per cent stake in Westgate, while CapitaMalls Asia holds 50 per cent and HSBC Institutional Trust Services (Singapore) Limited (as trustee of CapitaMall Trust) owns the remaining 30 per cent.

Initially, CapitaLand was to have occupied about half of Westgate Tower, but that plan was aborted last year. In August, the property giant announced that it will retain its corporate headquarters at Capital Tower in Singapore's Central Business District.

"CapitaLand adopts an active portfolio management strategy to enhance value for its shareholders. The sale of Westgate Tower is in line with this strategy," said a spokesman for the group yesterday.

Sun Venture and Low Keng Huat are two of three partners in another consortium - the third partner being Guthrie - that is developing Paya Lebar Square next to Paya Lebar MRT Station. This development includes 556 strata office units, the bulk of which have already been sold. Only about 20-plus office units are still available, which have an average asking price of around $2,300 psf.

Over at Samsung Hub in Church Street (near Raffles Place), Sun Venture itself owns four office floors. It also developed 50 Scotts Road near Newton MRT Station on a 15-year leasehold transitional office site.

Source: Business Times, 4 Jan 2014

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CapitaLand, related entities sell Westgate Tower

THE property market is getting the new year rolling in style with a half-a-billion-dollar investment deal.

A consortium comprising construction group Low Keng Huat and Sun Venture Homes has been granted options to buy Westgate Tower for $579.4 million from CapitaLand, CapitaMall Trust and CapitaMalls Asia.

This works out to about $1,899 per sq ft, based on 304,963 sq ft of net saleable area.

The consortium has up to Jan 24 to exercise the options.

The 20-storey Westgate Tower in Jurong Gateway is the office component of the Westgate integrated development, which also comprises the Westgate shopping mall.

The tower is expected to be completed later this year.

Westgate is a seven-storey mall with more than 250 stores from Basement 2 to Level 5, over a net lettable area of about 410,000 sq ft.

It opened on Dec 2 last year.

CapitaLand owns a 20 per cent stake in the Westgate integrated development, while CapitaMalls Asia owns 50 per cent.

HSBC Institutional Trust Services, as the trustee of CapitaMall Trust, owns the remaining 30 per cent.

A CapitaLand spokesman said the sale of Westgate Tower is in line with its "active portfolio management strategy".

The company has sold office buildings to third parties in the past - for instance, 8 Shenton Way, Hitachi Tower and Chevron House, the spokesman added.

CapitaLand has also sold properties to CapitaCommercial Trust, the real estate investment trust that it manages.

Mr Donald Han, managing director of property consultancy Chesterton Singapore, said that the deal is fair for both parties and "will set a benchmark in terms of pricing", being one of the first of its kind outside the central region.

Sun Venture and Low Keng Huat are no strangers to investing in suburban offices, said Mr Han.

The companies were part of a consortium that developed Paya Lebar Square, comprising 556 strata-titled office units next to Paya Lebar MRT station.

Said Mr Han: "There is a high probability that they will look into sub-dividing and "strata-titling" the Westgate development at some point in the future."

He added that the market in Jurong Gateway is "fairly new for office investments", but this could present a first mover advantage to Sun Venture and Low Keng Huat.

Developer Sim Lian's project at Venture Avenue will be another source of office supply in the Jurong East area, said Mr Han.

"There could be interesting competition in the strata-titled investment market in the Jurong area," he added.

Source: Straits Times, 4 Jan 2014