Goldman heads for S'pore property market exit

PHOTO: Goldman heads for S'pore property market exit

SINGAPORE - NTUC Income, which early last year acquired a 49 per cent stake in 16 Collyer Quay from Goldman Sachs, is now believed to be stitching a deal to buy out the remaining 51 per cent in the 999-year leasehold office tower from the US bank to gain full ownership of the asset.

The two sides are thought to have agreed on terms, although a deal is expected to be inked only next month at the earliest.

BT understands that the transaction values the office tower at around $660 million, or close to $2,400 per square foot on net lettable area of 278,356 square feet. Income's acquisition last year valued the property at about $626 million or $2,250 psf on NLA.

Goldman paid $811 million or $2,900 psf for 16 Collyer Quay - formerly known as Hitachi Tower - in early 2008.

When Goldman sells its remaining 51 per cent in Savu Investments, which owns the 37-storey office tower, it will mark the divestment of its last major Singapore real estate asset, say market watchers.

Its Savu stake is held by an entity, the shareholders of which are funds managed by affiliates of Goldman and an indirect subsidiary of the bank, according to an earlier report.

In 2010, Goldman funds sold DBS Towers on Shenton Way and Chevron House (formerly Caltex House) in Raffles Place (behind 16 Collyer Quay).

Income has been active in the Singapore property investment sales market this year. In July, Mercatus Co-operative Ltd - whose shareholders include Income - acquired a 50 per cent stake in nex, a mall in Serangoon, for $825 million.

In the same month, Income increased its stake in real estate fund Parkway Parade Partnership, which owns Parkway Parade in Marine Parade, to 46 per cent from 22 per cent, in a deal that valued the mall at slightly over $1 billion.

According to figures from Savills Singapore, about $5.3 billion of office investment sales originating from the private sector have been transacted year to date, down from $6.2 billion in full-year 2011.

Topping the list is DBS's purchase earlier this month of a 30 per cent stake in Marina Bay Financial Centre Tower 3 for $1.035 billion or $2,555 psf. Another transaction in December involved 79 Anson Road, a freehold office building that has been sold by Singapore's Central Provident Fund Board and German fund manager SEB to United Engineers for $410 million. The price works out to $2,029 psf.

A half stake in 78 Shenton Way changed hands in September in a transaction valuing the asset at $608 million or $1,686 psf. The property is on a site with a remaining lease of about 70 years. Other office deals announced this year include Mapletree Anson ($2,049 psf) and the Twenty Anson next door, which changed hands at $2,121 psf (without yield stabilisation support).

Meanwhile, Goldman seems to be stepping away from the market for now. In 2010, it sold Chevron House, on a site with a remaining land tenure at the time of about 78 years, to a fund managed by Deka Immobilien of Germany for $547 million or around $2,083 psf, and DBS Towers on Shenton Way for $870.5 million or $970 psf. At the time, DBS Towers had a remaining land lease of around 56 years.

Goldman reaped a profit from the DBS Towers divestment, having paid $690 million for the office blocks in 2005. However, its sale prices for Chevron House and 16 Collyer Quay are below its acquisition prices.

It paid $730 million or about $2,780 psf for Chevron House in 2007.