TripleOne Somerset

Co-working operator IWG to open flagship space at TripleOne Somerset


Global co-working operator IWG has leased over 35,000 sq ft of space at Perennial Real Estate’s TripleOne Somerset to operate its Spaces co-working concept. IWG owns and operates co-working brands like Regus, Spaces, No18, Basepoint, Open Office, and Signature. It operates about 3,300 locations in over 110 countries.

Spaces is a lifestyle co-working concept from Amsterdam. The site will be Spaces’ flagship facility and it’s largest when it commences operation in mid-2019. It will occupy two floors, Level 3 and 13, and will comprise co-working spaces, meeting rooms, private offices, conferencing facilities, and event spaces. It will also have a Business Club which will be accessible to its 3 million Spaces’ members.

TripleOne Somerset is currently undergoing a $120 million enhancement program to augment its retail offerings and incorporate about 32,000 sq ft of new medical suites. “Spaces’ unique event spaces are set to be great venues for medical and healthcare-related launches and events, which tie in well with one of the core themes of the development”, says Annie Lee, deputy CEO (Singapore) of Perennial. The new two-storey retail podium is expected to receive its Temporary Occupancy Permit by end-June, and works are expected to complete by 2019.

Source: EdgeProp, 3 My 2018

Office market deals pick up


The office market is now abuzz, as sentiment has swung from pessimism to optimism in just one year. Fears of an oversupply in the office market 18 months ago have evaporated, with investors now forecasting a period of relatively modest supply in 2018 to 2020. Jeremy Lake, CBRE executive director of capital markets, observes: “Singapore goes through periods of too much office space, and then periods of relative shortage.”

In the first four months of 2017, $3.39 billion worth of office deals were transacted. They include deals valued above $100 million, ranging from the sale of substantial strata space to stakes in a building or an entire building. The latest office deal done early this month was the sale of a 50% stake in Grade-A office building One George Street for $590 million ($2,650 psf). The buyer was FWD Group, the insurance arm of investment vehicle Pacific Century Group, controlled by Richard Li, the younger son of Hong Kong’s richest tycoon Li Ka-shing.

CBRE brokered four of the six office deals done so far this year, amounting to $1.91 billion, or 56% of the total $3.39 billion transacted. This includes the sale of the 50% stake in One George Street and DBS Bank’s entire interest in the holding company of PWC Building to an indirect subsidiary of Manulife Financial Corp for $746.8 million, considered one of the biggest office deals in 1Q2017.

The two other office deals brokered by CBRE this year were the sale of Sime Darby Centre to Tuan Sing Holdings for $365 million; and the sale of 79,500 sq ft of strata space in Prudential Tower to private-equity firm, One Tree Partners, for $206.6 million (see table).

The remaining two office deals that CBRE was not involved in were direct deals between the vendors and buyers. One was the sale of the entire interest in Plaza Ventures Pte Ltd — the registered owner and developer of GSH Plaza — to Fullshare Holdings for $725.2 million. The other direct deal was the sale of the 61% stake in Triple One Somerset to Hong Kong-listed Shun Tak Holdings for $758.2 million.

Source: The Edge Property, 13 May 2017

Singapore On Track For Record Real Estate Deals In 2017: RCA


Singapore posted one of the strongest performances in inbound real estate investment volume in the Asia-Pacific region for the first quarter this year.

The total deal value increased 170 per cent to reach US$2.3 billion, from US$838.2 million a year ago, according to a report released by Real Capital Analytics (RCA) on Friday.

Petra Blazkova, RCA's senior director of analytics for Asia-Pacific, told The Business Times: "In the last couple of years, Singapore has been through fairly slow market growth on the rental income side. The economy was quite subdued, so investors were shying a little bit away from Singapore because they couldn't foresee when the trend for growth would come.

"I don't necessarily see the strong rental growth appearing in the market as we speak right now, but somehow confidence has returned to the market, and I think it started with the first sale of Asia Square Tower One last year. That was the trigger."

As at April 2017, there were some 18 deals worth a total value of US$5.3 billion in contract.

These include the potential sale of Asia Square Tower Two, purportedly to CapitaLand and CapitaLand Commercial Trust at close to S$2,800 per square foot on net lettable area, as well as Jurong Point, which is in the midst of being transacted at S$2.2 billion between buyer Mercatus Co-operative and seller, a joint-venture between Lee Kim Tah Holdings and Guthrie GTS.

At this rate, Singapore appears to be on track to achieve record volumes in 2017, said Ms Blazkova.

"That's quite a high number for a relatively small market like Singapore. It's quite a good mix, too," she added, looking at the deals in the pipeline. "There are a few office transactions, some retail and also some industrial."

Most other markets in the region - Japan, China, Hong Kong, Australia, India and Taiwan - showed a drop in investment volumes, which RCA attributed to a shortage of investment-grade properties in the region's commercial real estate markets. Many real estate owners are also opting to retain their holdings on their assets.

Overall, the value of completed transactions for income-producing real estate in the Asia-Pacific fell by 21 per cent year on year for the first three months to US$22.6 billion - the lowest figure recorded since Q2 2010.

Australia led the slowdown in investments with a 59 per cent slide in deals, as it was the hardest hit by the imbalance in investment-grade properties.

Ms Blazkova said that in most places, there is a large group of investors looking at a small pool of assets, whereas in Singapore there has been a fair amount of assets available for sale, which has helped to support its transaction volume.

"It's the behaviour of the sellers in Singapore at the moment after a long time of sitting on their assets," she said.

Acute shortages of available stock in other countries have also affected pricing, and a mismatch in pricing expectations between buyers and sellers can lead to stalemate in closing deals.

The top three markets with the highest investment volume in the first quarter - Japan, China and Hong Kong - each registered weaker investment flows, contrasting against particularly strong activity registered in the same period of 2016.

In its data collection, RCA considered only deals worth at least US$10 million. It also excluded sales of development sites and interested party transactions, such as the divestments of assets from sponsors to trusts.

Investment sales data tends to differ from brokerage to brokerage due to differing definitions of what is considered a completed sale.

Source: Business Times, 13 May 2017

TripleOne Somerset office space up for sale

The rare offering of an entire floor of 15 office units in the premium Orchard Road area is expected to attract keen interest from investors.

All of the seventh floor of Somerset Tower in TripleOne Somerset has been put up for sale for about $41.56 million via an expression of interest.

The indicative price translates to about $2,650 psf for the 15,683 sq ft space, marketing agent CBRE told The Straits Times yesterday.

TripleOne Somerset - in Somerset Road - is a prime integrated development with two premium-grade office towers and a retail podium next to Somerset MRT station.

A $120 million renovation is under way to enhance the retail offerings, incorporate medical suites, and spruce up the office lobby and common areas.

The refurbishment work for the office space on the seventh floor will be completed in May, said CBRE.

The sale is expected to attract keen interest from investors, given the limited supply of this sort of property on the market. Ms Sammi Lim, director for capital markets at CBRE, said: "There hasn't been a launch of new strata office units and medical suites for sale in the Orchard Road precinct in over three decades." She said only resale units - typically in ageing buildings - are available and they are trading at premium prices due to scarcity.

A 6,867 sq ft space in Tong Building was sold at $25.5 million ($3,713 per square foot) last April, while another deal saw 7,330 sq ft of office space sold for $12.5 million ($1,705 psf) in Orchard Towers in July. Both freehold buildings were built in the 1970s.

TripleOne Somerset has a lease of 99 years, starting from Feb 19, 1975. Office tenants at the property include luxury fashion and lifestyle brands such as Gucci, Bottega Veneta, Samsonite and Bell & Ross.

CBRE noted rising interest from family office and property companies keen to take up space there, citing as an example Property Guru's relocation from its Novena office to TripleOne Somerset. "With monthly office rents at TripleOne Somerset hovering in the range of $8 to $8.50 psf, gross rental yields are close to 4 per cent, which is also attractive to investors," Ms Lim noted.

The expression of interest exercise closes on April 7.

Source: Straits Times, 23 Feb 2017

Perennial leads sale of 70% stake in TripleOne

Perennial Real Estate Holdings (PREH) is leading a group of investors that are selling their combined 70 per cent stake in TripleOne Somerset to Hong Kong's Shun Tak Holdings.

The divestment is being done in two parts. In the first, PREH and six other shareholders of Perennial Somerset Investors (PSI), their holding company for TripleOne Somerset, are offloading a combined 61 per cent stake in the property for $305 million.

PREH, which originally held 50.2 per cent of PSI, is divesting a 20.2 per cent slice while retaining 30 per cent. It will collect about $101 million for the sale, making a pre-tax gain of about $34.3 million.

The other six shareholders, all of whom have fully divested their stakes in PSI, are SingHaiyi Group, Boustead Projects, BreadTalk Group, Shun Fung Holdings, ROOI Holdings and Grandma's Holdings.

In the second divestment, Unified Elite Limited, another existing shareholder of PSI and a connected person to Shun Tak, will sell its 9 per cent stake to Shun Tak.

Shun Tak, which is making the purchase through its wholly-owned unit Simply Swift, will then own 70 per cent of PSI while PREH retains 30 per cent.

PREH syndicated a consortium of investors in December 2013 to acquire TripleOne Somerset for $970 million.

Its wholly-owned subsidiaries were appointed the development's project manager, asset manager and property manager and will continue to undertake these operations after the divestment.

The sale price was based on an agreed total property price of about $1.258 billion, or $2,200 per sq ft.

The divestments are expected to be completed by June 30.

PREH will use the proceeds from selling its 20.2 per cent to fund investments, the firm said.

TripleOne Somerset is a prime integrated development comprising two premium-grade office towers and a retail podium next to Somerset MRT station.

A $120 million refurbishment programme is under way at the development to augment the retail offerings, incorporate medical suites of about 32,000 sq ft and spruce up the office lobby and common areas.

In August last year, TripleOne Somerset officially launched the strata sale of its office space and medical suites at Somerset Tower, one of its two office towers. A few office units have since been transacted at an average price of above $2,600 per sq ft.

PREH chief executive Pua Seck Guan said: "Shun Tak's investment in TripleOne Somerset is a strong testament of their confidence in the Singapore market and the long-term value which can be created at the integrated development from the strata sale of the office space and medical suites and repositioning of the retail podium."

The retention of a 30 per cent stake in TripleOne Somerset will provide PREH with income stability and the opportunity to enjoy the upside from the strata sales and enhancement works, he added.

Source: Straits Times, 10 Feb 2017