Takashimaya hit by 20% rent hike for Ngee Ann City space

Takashimaya hit by 20% rent hike for Ngee Ann City space

 

TAKASHIMAYA Co is paying nearly a fifth more in rent to renew its tenancy at Ngee Ann City for the next three years.

The new rent, effective from June 8, for 226,000 sq ft of retail space in the heart of Orchard Road, is 19.75 per cent higher than what the Japanese retailer paid previously.

 

The revision is expected to account for a 7.2 per cent rise in annualised distribution per unit for owners of Macquarie Prime Real Estate Investment Trust (MP Reit).

 

As at end-March, this master lease with Takashimaya – negotiated through its subsidiary Toshin Development – made up about a quarter of MP Reit’s portfolio gross rent.

 

The Reit has a 27.2 per cent stake in Ngee Ann City, which is made up of 256,000 sq ft of net lettable retail space and 141,000 sq ft of net lettable office area.

 

Apart from Takashimaya Shopping Centre, the area under the master lease is also occupied by luxury retailers like Louis Vuitton, Chanel, Piaget and Burberry. Other brand-name retailers include Guess, Zara and Max Mara.

 

Mr Franklin Heng, chief executive of Macquarie Pacific Star, which manages the Reit, said the rental hike reflected Ngee Ann City’s premium location and quality.

 

‘Our master lease with Toshin is a valuable contributor to MP Reit’s performance, as it provides long-term income stability as well as the potential for rental upside every three years.’

 

Takashimaya Singapore, a unit of Takashimaya Co, has enjoyed strong sales.

 

Its most recent filing with the Accounting and Corporate Regulatory Authority showed a 23 per cent rise in after-tax profit to $28.7 million in 2006. Its results for last year are not yet publicly available.

 

MP Reit shares yesterday ended three cents lower at $1.13.

 

Source: Straits Times

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