Hi-tech rents, occupancy rates up

Hi-tech rents, occupancy rates up

Insufficient and expensive offices drive tenants to business parks, leading to 6.8% rise q-o-q


RENTS and occupancy rates for hi-tech and business park space were lifted in the second quarter of this year by spillover demand for office space, property consultants say. And rents for factories and warehouses have edged up too.


According to CB Richard Ellis (CBRE), the average island-wide hi-tech monthly rent rose 6.8 per cent quarter-on-quarter to $3.15 per sq ft (psf) in Q2. Year-on-year, the increase was 34 per cent.


Insufficient and increasingly expensive office space is driving tenants to hi-tech space or business parks, CBRE said in a statement yesterday.


Jones Lang LaSalle (JLL) also says that companies are relocating backroom operations to hi-tech space. Its latest figures show that the average island-wide hi-tech rent rose 2.4 per cent quarter-on-quarter to $4.25 psf per month in Q2. Compared with a year earlier, the increase was 63.5 per cent.


While figures from both property consultants indicate rising rents for hi-tech space, the degree of increase differs.


‘The disparity is a result of differences in the basket of properties that research houses use to track the market,’ said JLL’s head of research (South-east Asia) Chua Yang Liang. ‘This difference is more pronounced in periods when segments of the market respond differently to external stimulus.’


CBRE says that for business parks, the average occupancy rate was 88 per cent at end-March and could have exceeded 90 per cent by the end of Q2. This would be a new peak.


The firm’s director of industrial and logistics services, Bernard Goh, says that rents at business parks also rose in Q2.


More business park space will be coming on stream. According to CBRE, Biopolis Phase III will be completed in Q4 2009. And JTC Corporation launched a tender for Plot 61 in Changi Business Park last month.


For factory space, the average monthly rent for a ground-floor unit rose 3.3 per cent to $1.55 psf in Q2, says CBRE.


The average capital value of ground-floor units in 60-year leasehold strata-titled factories edged up about 3 per cent quarter-on-quarter to $302 psf.


Ground-floor units in warehouses registered a 3.3 per cent increase in average monthly rent to $1.55 psf in Q2.


Rising raw material costs, a stronger Singapore dollar and weakening demand for exports have made manufacturers cautious about their outlook, dampening demand for factories and warehouses, says CBRE.


‘However, the government has reiterated that the manufacturing sector will remain important to Singapore’s economy,’ it says. ‘As such, manufacturers are still encouraged to set up their facilities on the island, and demand for industrial space is expected to remain healthy.’


CBRE points out that recently there have been few purchases by industrial REITs, as funding availability has dropped. According to Mr Goh: ‘The limited credit supply is likely to continue to curtail the ability of the REIT players to expand their respective portfolios, but on the whole, industrial properties continue to remain an attractive asset class for institutional investors.’


Source: Business Times

Mapletree full-year earnings dip 3%

Mapletree full-year earnings dip 3%

But operating profit rises 35%; revenue jumps 69% to $365.6m


MAPLETREE Investments posted a 3 per cent dip in net earnings for the year ended March 31, 2008 to $1.04 billion because of lower net revaluation gain and higher net finance cost.


Operating profit, however, rose 35 per cent to $146.9 million on the back of first full-year contributions from VivoCity and St James Power Station (SJPS) and maiden contribution from The Beacon, a residential project at Cantonment Road.


The fully owned subsidiary of Temasek Holdings also achieved much higher occupancy and rental rates from all its investment properties across the board.


Revenue jumped 69 per cent to $365.6 million with VivoCity and SJPS contributing a total $99.5 million and The Beacon contributing $47.5 million.


The Temasek unit booked a net revaluation gain of $879 million (after deferred tax provision) for the latest financial year, lower than the $971.2 million in the preceding year.


Mapletree chairman Edmund Cheng said the group is exploring several mixed-use commercial projects in Vietnam (in Ho Chi Minh City, Hanoi and the provinces abutting them). ‘In line with our business model, we will seed these projects with our own balance sheet, and will consider the possibility of starting a Vietnam-focused fund once we have achieved a significant asset size,’ he said in his message in Mapletree’s latest annual report.


Elsewhere in the report, the group revealed it is ‘in the advanced stage of evaluating several projects comprising a wide spectrum of property types, from office, retail, residential, to industrial and service residential properties, with a view to seed a new Vietnam fund with these assets over the next few months’.


When asked, Mapletree’s spokeswoman said the Vietnam fund will be started within the next 12 months but this will depend on market conditions in Vietnam. The fund size will be at least US$500 million.


Mapletree’s real estate assets, both owned and managed, stood at $8.9 billion as at March 31, 2008, up 59 per cent from $5.6 billion a year earlier. Of these, its third-party assets under management (AUM) amounted to $3.1 billion, an increase of 94 per cent, while the group’s owned assets grew nearly 45 per cent from $4 billion to $5.7 billion.


Fee income, excluding fee income from associates, grew 40 per cent last year. The group’s AUM and fee income will be boosted significantly in the current financial year from the Mapletree India-China Fund launched in April this year and a new Mapletree-Arcapita Bank fund formed to hold the $1.7 billion portfolio of properties acquired from JTC Corp.


In an interview with BT in April this year, Mapletree CEO Hiew Yoon Khong projected the group’s total assets could hit $15 billion to $20 billion in a year.


The India-China fund has secured a US$600 million commitment at the initial closing and is currently marketing its second closing with a target to secure a total commitment of US$1.5 billion.


In Singapore, the group is developing Mapletree Business City, an office and business park with 1.7 million sq ft of total net lettable area and slated for completion in second-half 2010.


It is also developing a 19-storey Grade A office building at Anson Road called Mapletree Anson, which is expected to be ready in mid-2009. These two assets could be potentially sold at some point to the proposed Mapletree Commercial Trust.


This trust was to have been listed here earlier this year holding about $3 billion of the group’s assets in the HarbourFront and Alexandra Precincts with VivoCity as the anchor asset. However, the launch has been deferred due to unfavourable stock market conditions.


Source: Business Times

Business parks and high-tech sites gaining popularity

Business parks and high-tech sites gaining popularity


BUSINESS parks and other high-tech industrial sites in Singapore have become increasingly popular among eligible tenants.

According to a new report released yesterday by CB Richard Ellis (CBRE), the overall occupancy rate at business parks probably hit a new high of 90 per cent last month, up from 88 per cent in March.


To rent space at sites like Changi Business Park, prospective tenants must meet certain criteria. These include carrying out research and development work.


Rental rates at these high-tech spaces are heading north. The rates may be cheaper than ultra-high-tech business parks and prime office space, but they were expected to have risen 6.8 per cent last month to $3.15 per sq ft per month from the first quarter.


The popularity of these sites, the report said, was due to the ‘limited availability and continued rental increases’ of office space in the Republic, although the dizzying upward spiral in rental rates had abated in recent months.


Nevertheless, prime office spaces can cost upwards of $16 per sq ft per month – far more expensive than in business parks.


Last year, prime office rents nearly doubled on the back of tight office space and a strong demand from occupiers, including global financial institutions expanding their operations in Singapore. This was on top of the 50 per cent-plus rise that prime office rents registered in 2006.


More business park and other high-tech sites are being built in Singapore. Recently, two business park sites in one-north were awarded.


Biopolis Phase III, which will have a gross floor area of 41,505 sq m when completed late next year, is being built by Crescendas Bionix.


Solaris, formerly known as Fusionopolis Phase 2B, will be built by Soilbuild Group Holdings. When completed by June next year, Solaris will have a gross floor area of 50,271 sq m.


Industrial landlord JTC Corp has also launched a new ‘concept and price’ tender at Changi Business Park.


This site will have a maximum gross floor area of 47,006 sq m, of which 40 per cent is designed for hotel and retail use. The tender will close next month.


Source: Straits Times

Mapletree planning $682m fund in Vietnam

Mapletree planning $682m fund in Vietnam


REAL estate firm Mapletree Investments is setting up a US$500 million (S$682 million) fund to invest in properties in fast-growing Vietnam, to be launched within 12 months.

The Temasek Holdings unit said it is setting up the fund to ‘harness Vietnam’s rising development cycle, and to tap into the growing affluence of the middle-class segment of its population’.


Mapletree unveiled its plans for the fund in its recently published annual report.


It is ‘currently in the advanced stages of evaluating several projects comprising a wide spectrum of property types, from office, retail and residential to industrial and service residential properties, with a view to seed a new Vietnam fund with these assets over the next few months’.


Mapletree spokesman Shae Hung Yee said the company plans to launch the fund, which will be at least US$500 million in size, within the next 12 months.


This timeline, however, may be altered depending on ‘market conditions’, she said. ‘We will make sure the time is right before starting any fund,’ she added.


Mapletree’s fund will include its own seed money, said Ms Shae, who added that the firm is considering ‘syndicating the fund’ out to like-minded investors with aligned interests.


The move is part of Mapletree’s efforts to tap into the high growth potential of emerging markets such as China, India and Vietnam, said chairman Edmund Cheng in the company’s annual report.


Mapletree posted a net profit of $1.04 billion for the financial year ended March 31, down 3 per cent from the year before.


On Tuesday, it announced that it had completed a $1.71 billion acquisition of industrial landlord JTC Corporation’s assets in Singapore.


The JTC properties, comprising 39 multi-storey factories and 23 offices and warehouses, had originally been slated for a real estate investment trust. Plans to list the trust were subsequently scrapped due to poor market conditions.


Mapletree owns and manages $5.7 billion worth of real estate assets in Singapore, including the VivoCity mall and St James Power Station. It manages about $4.8 billion worth of assets in the region. The latter figure includes the recent JTC acquisition.


Source: Straits Times

Business park occupancy rates may hit new high

Business park occupancy rates may hit new high


SINGAPORE : Business parks are set to see occupancy rates go beyond 90 per cent by the end of June this year to hit a new peak, according to property consultants CB Richard Ellis (CBRE).


At the end of March, the average occupancy rate for business parks stood at about 88 per cent.


CBRE said office space shortage and persistent rent increases are driving office tenants towards industrial properties.


This has pushed up business park rents by an average of 30 per cent since the start of the year.


During the second quarter, two business park sites at one-north were awarded, which will add over 90,000 square metres of space by the end of 2009.


Source: Channel NewsAsia

Singapore Expo to beef up services, facilities

Singapore Expo to beef up services, facilities




THE Singapore Expo Convention and Exhibition Centre is introducing new services and facilities to boost efficiency and attract bigger groups of visitors.


One initiative is a porter service – Porter Xpress – at the Expo’s business centre. The service will transport luggage to the airport from hotels or the Expo for business executives and meetings, incentive travel, conventions and exhibitions (MICE) participants with late flights.


Additionally, in conjunction with media partner At-life, advertisements will be broadcast on LCD TV screens at the Expo, some food outlets and ferry terminals. The screens will allow organisers to publicise events to more than two million viewers monthly.


Free Wi-Fi is available at selected areas of the Expo, with wireless connectivity for 3.5G mobile phones. But 3.5G wireless broadband service users will have to buy a SIM card. Four digital information kiosks will also be installed at the Expo.


In June, JTC Corporation launched a concept and price tender for the development of a 4.7 hectare integrated business park project with retail and hotel components at Changi Business Park, which is near the Expo.


The hotel will make accommodation more convenient for overseas exhibitors and visitors attending events.


Proposals for the tender have to be in by Aug 19. According to the tender document, bidders may opt for either a term of ’30 years with an option for a further term of 30 years’, or 60 years.


Source: Business Times

Mapletree, Arcapita in real estate JV

Mapletree, Arcapita in real estate JV

Fund to hold $1.7b portfolio of industrial properties


MAPLETREE Investments has entered a joint venture with Arcapita Bank to form a private real estate fund called Mapletree Industrial Trust (MIT). The fund will hold the $1.71 billion portfolio of high-rise, ready-built industrial properties acquired from JTC Corporation.


Mapletree will hold a 25.1 per cent stake in MIT, while Arcapita will hold 56.5 per cent. Mapletree Industrial Fund, a pan-Asian private real estate industrial fund sponsored by Mapletree, will own the rest.


‘We will explore the possibility of listing this portfolio as a Reit in due course, possibly in combination with other Mapletree industrial assets,’ Mapletree’s CEO Hiew Yoon Khong said yesterday.


MIT took official control of the industrial properties yesterday. The portfolio comprises 39 blocks of flatted factories, 12 amenity centres, six stack-up buildings, one ramp-up building, three multi-tenanted business park buildings and one warehouse building. Mapletree’s wholly owned subsidiary Mapletree Industrial Fund Management will manage the properties.


Mr Hiew said Arcapita’s involvement as a joint-venture partner in MIT supports ‘our view that this is a high quality portfolio of real estate’.


Headquartered in Bahrain, Arcapita provides syariah-compliant alternative investments and counts high net worth individuals and institutions among its investors. The bank opened its Singapore office in January.


‘The properties in the portfolio are attractive and well-diversified in terms of tenancy, location and asset type, and are well placed to continue to perform strongly,’ Mapletree and Arcapita said in a joint statement yesterday.


The partnership marks Arcapita’s first major investment in South-east Asia and its first venture with Mapletree. ‘The acquisition of this JTC portfolio, given its scale and quality, is an excellent start for Arcapita’s Singapore office as we seek to increase our investments and presence across Asia,’ said Arcapita CEO Atif Abdulmalik.


Source: Business Times

Tampines site to anchor H2 industrial land sales

Tampines site to anchor H2 industrial land sales

Reserve sites comprise new plot in Jurong, six sites rolled over from H1


(SINGAPORE) The Ministry of Trade and Industry (MTI) yesterday unveiled an industrial land sales programme for the second half of 2008 that could yield a total supply quantum that is a tad above that of the first half.


The latest slate has just one site on the confirmed list, at Tampines Industrial Avenue 4 (opposite the wafer fab park and near the Giant, Courts and Ikea outlets) and seven plots on the reserve list, of which only one is new – a plot in Jurong at Pioneer Road North/Soon Lee Road. The other six reserve list plots are being rolled over from H1 2008.


Both new sites at Tampines and in Jurong are being offered on 30-year leasehold tenures and zoned Business 2, which means they can be developed for a wide range of uses such as clean/light industry, general industry and warehouse.


The 5ha Tampines plot on the confirmed list will have minimum floor-plate size and product-type stipulations. ‘The objective of such conditions is to address demand for industrial space for single-users which need larger floor plates,’ MTI said.


Colliers International director (industrial) Tan Boon Leong envisages the plot to be developed into a low-rise industrial facility of at most two and a half storeys (with mezzanine offices) as the site has just a 0.8 plot ratio (ratio of maximum potential gross floor area, or GFA, to land area).


‘Industrialists like low-rise premises so this site should be well sought after by both industrialists and developers,’ Mr Tan reckons. He estimates the site will fetch bids of at least $40-$50 per square foot per plot ratio (psf ppr), or $17.2 million to $21.5 million in absolute terms. The plot, which can have a maximum GFA of about 430,000 sq ft, is slated for launch in November.


Mr Tan expects the Pioneer Road North reserve-list site to fetch around $35-$45 psf ppr. The site will be made available for application in October.


The government releases a site on the reserve list only upon successful application by a developer that undertakes to bid at a minimum price acceptable to the state.


Confirmed list plots on the other hand are launched according to a pre-stated schedule, regardless of demand.


The other six reserve-list plots for H2 2008 that are being rolled over from the H1 list are located at Yishun Avenue 6 (two parcels), Toh Tuck Avenue, Ubi Avenue 4, Kallang Pudding Road and Serangoon North Avenue 4. All six plots are zoned for Business 1 use, meaning they can be developed for clean and light industrial, and warehouse use.


The Toh Tuck plot has 30-year leasehold tenure while the other five are being offered on 60-year leases.


MTI’s H2 2008 sole confirmed list site can potentially generate about 40,000 sq metres GFA, similar to the 42,000 sq m from the only confirmed plot in H1 2008 located at Woodlands Industrial Park E5.


The seven reserve plots in H2 may be developed into some 188,570 sq m GFA, or 8 per cent higher than the 174,570 sq m from the seven plots in the H1 slate.


‘MTI probably wants to keep the status quo in the industrial property market, which has been pretty stable this year,’ Colliers’ Mr Tan suggested.


Source: Business Times

Mapletree and Arcapita form joint venture to hold JTC industrial portfolio

Mapletree and Arcapita form joint venture to hold JTC industrial portfolio


SINGAPORE: Mapletree Investments has formed a joint venture with Arcapita Bank of Bahrain to hold a portfolio of industrial properties bought from JTC Corp.


The assets are worth a combined 1.7 billion Singapore dollars.


Arcapita will hold a 56.5 per cent stake in the joint venture called Mapletree Industrial Trust (MIT).


Mapletree will own 25.1 per cent, while the rest will be held by Mapletree Industrial Fund, a pan-Asian private real estate industrial fund sponsored by Mapletree.


In a statement, Mapletree said the acquisition of JTC’s industrial property portfolio, which was announced in April, has been completed.


The properties include 39 blocks of flatted factories, 12 amenity centres, three multi-tenanted business park buildings and one warehouse building.


The assets have been officially transferred to MIT on July 1.


Mapletree Industrial Fund Management will manage the properties. – CNA/vm


Source: Channel NewsAsia

MTI to release 8 industrial sites in the second half this year

MTI to release 8 industrial sites in the second half this year


The Trade and Industry Ministry will release eight industrial sites with a total area of some 13 hectares for the second half this year.


Of these, only one is in the confirmed list, while the rest are released under the reserve list.


The site confirmed for sale is located at Tampines Industrial Avenue 4.


MTI said that for this site, JTC will be introducing specific technical conditions on minimum floor plate size per unit and the product type.


The objective of such conditions is to address demand for industrial space for single-users which need larger floor plates.


Further details on these conditions will be announced by JTC when the site is ready for launch.


Other sites released under the reserve list include those at Yishun, Kallang Pudding Road and Serangoon North.


Under the reserve list, the Government will only release a site for sale if an interested party submits an application for the site to be put up for tender.


The tender offer must be of a minimum purchase price that is acceptable to the Government.


The figures of the site releases are identical to government industrial land sales programme for the first six months of the year.


Source: 938Live