Singapore Corporate News - 4 Jan 2008

Market St Car Park may be redeveloped into offices

CAPITACOMMERCIAL Trust (CCT) has been granted outline planning permission by the Urban Redevelopment Authority (URA) to redevelop Market Street Car Park into an office tower that could cost up to $1.5 billion.

Lynette Leong, chief executive of CCT's manager CapitaCommercial Trust Management Ltd, said the viability of the project would depend on the development premium to be paid for changing the use of the 58,964 sq ft site from a car park to an office tower.

The premium will depend on the enhancement in land value as assessed by the chief valuer, which CCT expects to be made known by May.

Ms Leong said the outline permission is subject to the payment of 100 per cent of the enhancement in land value, instead of the standard 70 per cent, as well as there being no extension of the present lease, which runs to 2073.

Assuming a land value for 99-year commercial land of $900 psf per gross floor area, and adjusting for the shorter leasehold of the site, CCT estimates the land and development premium to be $800 psf.

Including construction and other costs, the project cost would be $1.25 billion.

But CCT said that depending on the development premium, the total project cost could range from $1 billion to $1.5 billion.

Assuming that necessary approvals are granted, a new office tower with an estimated gross floor area of 850,000 sq ft could be built within 36 or 40 months. Ms Leong said that existing tenants, who only moved into Market Street Car Park in end-2006 after a $14 million renovation, will be given notice soon.

Currently, there are 704 car parking spaces, 28 tenants, and 21,205 sq ft of net lettable area. As at June 1, it was valued at $59 million.

Saying that CCT has no plans to divest the office tower if built, Ms Leong added: 'When completed, the property would augment the core assets in CCT's portfolio which currently includes landmark office buildings such as Capital Tower and 6 Battery Road.'

She said she was bullish on the office sector. While she did not reveal estimated yields for the development, she said that it was looking at projected rents of $12-$14 psf per month.

The outline planning consent comes years after CCT parent CapitaLand first mooted plans to redevelop both Market Street Car Park and Golden Shoe Car Park.

It was reported that the URA first rejected redevelopment plans for the car parks as earlier as in the mid-1990s when the properties belonged to the now defunct Pidemco.

Ms Leong said there are currently no plans to redevelop Golden Shoe Car Park, although it has also applied for a change of use for the site.

Goodman Group set to manage JTC Reit

JTC Corporation is set to appoint Australian-listed property and wealth management company Goodman Group to manage its upcoming real estate investment trust (Reit), sources say.

The news follows last month's report in the Australian Financial Review that Goodman Group beat competitors - including Singapore's CapitaLand and Mapletree Investments - to become the manager of Singapore government-owned JTC Corporation's upcoming trust.

Other names in the running included Challenger Financial Services Group and CapitaLand subsidiary Australand, both of which are listed on the Australian stock exchange, the report said.

The report also said that UBS, Goldman Sachs and DBS are in line to underwrite the offer.

Industry players said the Reit's initial property portfolio is expected to be worth more than $1 billion.

When contacted by BT, JTC said that the selection is still ongoing. JTC said in July 2007 that it would announce the winning manager and underwriter by the end of that year.

'We are in the process of selecting the Reit manager and we will give updates at the appropriate time,' said a JTC spokeswoman.

Goodman already has substantial assets in Asia, including a 40 per cent stake in the manager of Singapore-listed Ascendas Real Estate Investment Trust (A-Reit).

Goodman is looking to expand in the region, market watchers have said. In mid-2007, Macquarie and Goodman ended a partnership that began in 2001. Macquarie paid more than A$730 million (S$922.4 million) to divest its investment in Goodman.

JTC, Singapore's biggest industrial landlord, said last July that it will divest some $1.4 billion-$1.6 billion worth of assets and focus its attention on strategic developments with a longer payback time.

The bulk of the assets to be sold will be pumped into a Reit, chief executive Ow Foong Pheng told reporters at the time.

JTC also said at the same time that it has short-listed seven Reit managers and would announce the winning manager by the end of 2007. The Reit was scheduled to be listed on the Singapore Exchange (SGX) in the second quarter of this year.

A-Reit, Singapore's second Reit, was set up by JTC unit Ascendas five years ago. The trust has since expanded by acquiring industrial buildings.

Golden Agri-Resources proposes stock split

GOLDEN Agri-Resources has proposed a stock split. The oil palm grower and processor told the Singapore Exchange (SGX) yesterday it plans to divide each of its issued shares into two.

The move will increase trading liquidity of the shares and broaden the shareholder base of the company, Golden Agri-Resources said.

Golden Agri-Resources director Simon Lim explained: 'The company aims to be consistently featured as one of the top traded shares on the Singapore Exchange. We look to have a good mix of both retail and institutional investors.'

The company said in a statement yesterday that the reduced price of each split share following the split will 'increase the accessibility and attractiveness of the shares of the company, and hence encourage greater participation by investors'.

It added: 'By improving the accessibility of an investment in the company to more investors, it may also broaden the shareholder base of the company.'

The share split of each existing ordinary share of par value five US cents each will result in two ordinary shares of par value 2.5 US cents each.

The share split is subject to the approval of the shareholders at an extraordinary general meeting to be convened, and regulatory approval from SGX.

Golden Agri-Resources saw enormous gains in its market capitalisation - which is the company's current share price multiplied by the total number of shares - last year.

Its market cap grew by $7.95 billion over the year to $10.6 billion. This is four times what it was at the end of 2006.

Soaring crude oil prices have led to a search for alternative sources of fuel such as bio-diesel, which primarily comes from palm oil. This, and the voracious appetite from emerging economies such as China have caused palm oil prices to shoot up.

The company produces 10 per cent of Indonesia's crude palm oil, and plans to spend US$300 million to increase its landbank and feedstock. Besides China, it is also gunning for growth in markets such as Pakistan, Africa, Europe and the United States.

Golden Agri-Resources' share price gained three cents or 1.5 per cent to close at $2.09 yesterday.

Yanlord acquires site for residential devt in Shanghai

REAL estate developer Yanlord Land Group is extending its presence in Shanghai through the purchase of a residential development site for 600.4 million yuan (S$118.7 million).

Yanlord subsidiary Shanghai Renjie Hebin Garden Property Co acquired the 117,459 square metre site in Qingpu District in a government auction last month.

Commenting on the acquisition, Yanlord chairman and chief executive officer Zhong Sheng Jian said: 'Shanghai remains a key focus in our expansion strategy.'

He said the acquisition, together with the acquisition last November of the New Jiangwan Urban Area site in Shanghai Yangpu District, shows the company's continued confidence in the potential of the Shanghai real estate sector.

'This latest acquisition not only replenishes our land bank in Shanghai, in which we have been the early entrants since 1993. More importantly, this newly acquired site also allows us to further establish our foothold in the rapidly emerging Qingpu District where our Shanghai Yunjie Riverside Garden Phases 1 and 2 are located,' he added.

The site has a view of Yangli Jing River, Dingpu River and Daying Harbour. With a plot ratio of 1.0, the site cost 5,112 yuan per sq metre of gross floor area. Yanlord plans to develop the site into a high-end residential development comprising low-rise and townhouse apartment units.

Yanlord Land is based in China and focuses on developing high-end integrated residential projects and integrated property development projects in high-growth cities in China.

Yanlord entered the China market about 15 years ago and developed a number of large-scale residential property developments with international communities of residents, such as Yanlord Gardens, Yanlord Riverside Gardens, Plum Mansions and Orchid Mansions.

Offer for Vantage after chief sells stake

FORMER Vantage Corporation chief Kea Kah Kim yesterday sold off his whole stake in the former publishing company to Galleria Resources for $48.4 million.

In a statement to the Singapore Exchange late yesterday, Eastunited Holdings and Fitfield Investments - of which Mr Kea is director and shareholder - agreed to sell 201.8 million shares or 77.52 per cent of Vantage to Galleria Resources.

Following this, Galleria Resources is making a mandatory unconditional cash offer for the remaining Vantage shares at 24 cents each.

Eastunited sold off its entire 124 million shares or 47.63 per cent, while Fitfield Investments sold its whole stake of 77.8 million shares or 29.89 per cent in the company to Galleria Resources.

Mr Kea did not respond to calls by press time.

Last month, the Singapore Exchange decided to delist Vantage Corporation after it did not approve Vantage's proposed acquisition of Healthway Medical Services (HMS), because the enlarged group of companies for both Vantage and HMS would fail to satisfy listing rule requirements.

It has been more than three years since trading in Vantage shares was suspended on Sept 2, 2004, after it divested its core publishing business.

Sincere Watch sells Chrono Star stake

SINCERE Watch said it has agreed to sell 175,000 shares or one per cent of Chrono Star International Participations Groupe Franck Muller SA for $10.96 million to Tay Liam Wee, a director and controlling shareholder of Sincere Watch. Chrono Star is a private limited company incorporated in Luxembourg and the parent company for the Franck Muller Group.

Enzer not going ahead with rights issue

ENZER has decided not to proceed with its proposed renounceable rights issue of convertible bonds. This is in view of it planning to raise up to $150 million from a proposed bond issue of redeemable zero coupon convertible bonds to DB Zwirn Mauritius Trading No 3 Ltd.

Asian Micro to buy stake in Cryothai

ASIAN Micro Holdings has signed a memorandum of understanding (MOU) with Sombat Lohkitdvanich to acquire 40 per cent of his company Cryothai Co for 84 million baht (S$4.09 million). Cryothai provides leasing of cryogenic vessels on trailers and also owns a liquid natural gas plant located in Nongtoom in Sukhothai Province, Thailand.