Macquarie, Blackstone and Frasers Centrepoint have been shortlisted for the purchase of Guthrie and Lee Kim Tah's space in Jurong Point mall. The Business Times understands that Macquarie and Blackstone have each offered about S$2.2 billion - crossing S$3,350 per square foot (psf) on the 658,000 square foot commercial net lettable area owned by the equal joint-venture between Lee Kim Tah Holdings and Guthrie GTS in Jurong Point. The net yield is about 4 per cent.
Frasers Centrepoint's offer is said to be below S$2 billion. The trio are now doing due diligence on the asset before they finalise their bids. The three are said to be among nine parties that made submissions during an expressions of interest (EOI) exercise that closed on Nov 18.
Singapore's biggest suburban shopping centre, Jurong Point, is connected seamlessly to the Boon Lay MRT Station and Bus Interchange. The asset was put on the market in the fourth quarter of 2016 with a price tag exceeding S$2 billion, translating to more than S$3,000 psf. Other bidders who are understood to have participated in the EOI exercise include Link Reit of Hong Kong, PGIM (formerly Pramerica Investment Management) as well as some of Singapore's big mall owners.
Private equity giant Blackstone is familiar with the Singapore property market. Last year, it acquired a 75 per cent interest in three Singapore properties at 896 Dunearn Road, 315 Alexandra Road (next to Ikea) and 10 Jalan Kilang (off Jalan Bukit Merah) from Sime Darby; the deal valued the properties at around S$300 million. Blackstone also owns 21 Anderson Road, a 10-storey building of 34 units.
Blackstone's Tactical Opportunities Fund was a partner in City Developments Ltd's (CDL) S$1.5 billion profit participation securities exercise in 2014 to invest in the cashflows of CDL's Quayside Collection asset on Sentosa Cove.
Macquarie does not own any real estate in Singapore, but has a presence elsewhere in Asia, including a big China retail portfolio. Frasers Centrepoint Ltd group - including its sponsored shopping centre Reit, Frasers Centrepoint Trust - owns 12 malls on the island with more than two million sq ft net lettable area.
Guthrie and Lee Kim Tah are divesting a total net lettable area (NLA) of 702,000 sq ft - including 44,000 sq ft of space under the government's Community/Sports Facilities Scheme (CSFS), which is being used by occupiers such as NTUC First Campus Co-operative's My First Skool and voluntary welfare organisations.
There is a further space of about 59,000 sq ft under three strata retail units divested by Lee Kim Tah and Guthrie about two decades ago to Golden Village, NTUC FairPrice and POSB - taking the total net lettable area in Jurong Point to 761,000 sq ft.
The mall is nearly fully let.
Guthrie and Lee Kim Tah are offering their 702,000 sq ft in the mall through the sale of shares in companies that own this space. BT reported earlier that the partners, having owned the property for many years, were keen to pursue new interests and opportunities. Lee Kim Tah was delisted in early 2015 and Guthrie in November 2013.
Jurong Point draws an average monthly visitorship of six million and has a catchment of 150,000 households within a five-kilometre radius, with potential for growth as the new town planned in Tengah is progressively developed.
Major tenants for the space at Jurong Point owned by Guthrie and Lee Kim Tah include FairPrice Xtra, Courts, Harvey Norman, BHG, Uniqlo and Kiddy Palace, in addition to three foodcourts. Jurong Point stands on two sites; one has a balance lease term of about 76 years and the other, 88.5 years. Their combined land area is 557,288 sq ft.
The original Jurong Point was completed in 1995 and spans four levels of retail space (Basement 1 to Level 3). The CSFS space is on Levels 4, 5 and 6. The extension, which was completed in 2008, has three retail floors - Basement 1 and Levels 1 and 3. About 1,000 carpark lots in Jurong Point are available for use by shoppers.
The mall's total gross floor area (GFA) is 1.07 million sq ft; there is no unutilised GFA, but potential buyers would no doubt be looking at the possibility of raising the mall's income by increasing the retail area and subdividing some of the anchor tenant spaces into smaller units to extract higher per square foot rentals.
Adapted from: The Business Times, 9 January 2017