Changi complex to be sold for $518m

SINGAPORE - A mixed-use building complex in Changi is being sold for $518 million in what will be one of the biggest commercial real estate deals since 2010.

United Engineers told the Singapore Exchange on Thursday that its unit will sell UE BizHub East to the manager of Viva Industrial Real Estate Investment Trust, which is preparing for launch.

United Engineers group managing director and chief executive Jackson Yap told The Straits Times on Thursday that his firm may also spin off a Reit of its own, but only if it has enough projects in the pipeline."We're not quite there," he said.

UE BizHub East, which is in Changi Business Park, consists of two adjoining business buildings, a 251-room Park Avenue Changi hotel and a convention centre with retail space.

These add up to around 634,000 sq ft of net floor area, translating to a sale price of about $817 per sq ft (psf).

The $518 million sale price is markedly above its market value of $293 million as at Dec 31 last year, which was determined in an independent valuation by Colliers.

Mr Yap said United Engineers was selling UE BizHub East mainly to get capital for other property projects. He added that the firm was eyeing upcoming land tenders, whether for residential or commercial developments.

There have been few commercial real estate deals above $500 million in the past few years. The most recent was in October 2010 when Keppel Land paid K-Reit $573 million for Keppel Towers and the adjacent GE Tower.

Mr Yap also noted that United Engineers has a track record of divesting its developments.

It sold the UE Tech Park warehouse at Pandan Loop for $115 million to Australian-listed MacarthurCook in 2006, before MacarthurCook's Reit listing here in 2007.

In 2011, it sold an industrial complex at Tai Seng called UE Print Media Hub for $51 million to Singapore-based Crescendas Group.

melissat@sph.com.sg

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