Perennial and SPH raise stakes in Chinatown mall

Perennial Real Estate Holdings and Singapore Press Holdings (SPH) have bought an additional 60 per cent of a partnership holding Chinatown Point mall and four strata office units above it for a cash consideration of S$92.6 million.

Perennial's effective stake in the partnership rose from 5.15 per cent to 45.15 per cent. SPH's stake rose from 7.35 per cent to 27.35 per cent.

"In addition to its prime location, excellent transport connectivity and strong trading performance, Chinatown Point Mall presents good upside potential," said Perennial CEO Pua Seck Guan in a press release.

The acquisition was made through the respective companies' subsidiaries buying their new stakes in Perennial Chinatown Point LLP (PCP LLP), the holding partnership.

The stakes were bought from two funds managed by Savills Investment Management.

PCP LLP owns the six-storey Chinatown Point retail mall as well as four units in the 25-storey strata office tower on top of it.

Other investors in PCP LLP include NTUC FairPrice Co-Operative and some other private investors.

The cash consideration paid was based on an agreed property value of S$442.5 million.

This translates to a price of S$2,077 per square feet (psf) of net lettable area (NLA).

The retail mall has an NLA of 209,000 sq ft and the strata offices, 4,230 sq ft.

Perennial said the purchase price "compares favourably with many recent real estate transactions in Singapore".

The projected net property income yield is 5.2 per cent in 2016.

Net property income refers to what is left after subtracting property operating expenses from rental and other operating revenue.

Yield is calculated by dividing income by property value.

Chinatown Point Mall reopened in November 2012 after being renovated and linked to Chinatown MRT.

Major tenants include the NTUC Fairprice supermarket and Japanese retailers Daiso and Uniqlo.

A Chinese-themed library is also there.

As at end-October, the retail mall was 97 per cent occupied, and the four office units were all occupied.

The lease on the mall expires in November 2079.

Average shopper traffic at the mall has grown steadily in the last few years along with tenant sales, said Perennial, which currently manages the mall.

Some 2.4 million people visit it every month, or roughly 80,000 a day.

Perennial last traded up half a cent to S$0.82, and SPH, up four cents to S$3.70 on Monday before the announcements were made.

This article was first published on November 29, 2016.
Get The Business Times for more stories.