Suntec Reit sells Chijmes for $177m to Pua-linked entity

	Business Times: Fri, Oct 28
SUNTEC Real Estate Investment Trust (Suntec Reit) is selling Chijmes for $177 million to an entity whose shareholders include Pua Seck Guan's Perennial Real Estate group and OSIM boss Ron Sim. Mr Pua and Mr Sim are also joint majority shareholders (40 per cent stake) in the nearby Capitol project, which will have retail/theatre, hotel and residential components. According to a Perennial spokesperson, this acquisition provides good synergistic opportunities between the Chijmes and Capitol sites. 'We like this site because it's a good opportunity to own an iconic heritage landmark commercial site, and it's very rare to get an opportunity to invest in such a large commercial site right in the downtown core of Singapore CBD (central business district), with a low plot ratio of 0.8,' said the Perennial spokesperson. HSBC Institutional Trust Services (Singapore), as trustee of Suntec Reit, entered into a property sale agreement with PRE 8 Investments Pte Ltd for the 154,062 sq ft plot located along Victoria Street. With a gross floor area of 127,793 sq ft, the $177 million price tag translates into about $1,385 psf ppr (per sq ft per plot ratio). The area was valued at $143.7 million by DTZ Debenham Tie Leung (SEA) as at Oct 15, placing the divestment at 23.2 per cent above the valuation. Suntec Reit is expected to recognise an estimated gain of about $39.5 million following the divestment. The sale of Chijmes follows an expressions of interest exercise conducted by Colliers International. According to Suntec Reit's results for the third quarter ended Sept 30, the property posted revenue of $2.7 million and net property income of $1.8 million during the quarter. Going forward, PRE 8 Investments intends to spend some $40 million to rejuvenate the asset. 'In terms of efficiency of the asset, it will be enhanced; the tenancy mix will be reviewed and optimised; and in terms of ambience, a lot can be done to improve and blend it with the precinct. Over time, we hope to enhance the rental revenue from this asset.' Chijmes has 79,794 sq ft of net lettable area and includes several conservation buildings and two gazetted national monuments - Chijmes Hall (the former CHIJ Chapel) and Caldwell House. Chijmes is on a site with a remaining lease of about 79 years. It has 97 car park lots and is located opposite Raffles City and the City Hall MRT Station. Tenants include Lei Garden Restaurant and Harry's Bar. The completion of the divestment is expected to be sometime in January 2012.   Source: Business Times