Singapore spending up
SINGAPORE’S top real estate investors have locked in dominance of commercial property buying with a series of end of year deals signalling their confidence in the market.
Major groups, led by the likes of CapitaLand and Singapore’s sovereign wealth fund GIC, have set a fierce pace with the former group closing on its third skyscraper deal in a month, taking its holdings in Sydney to $1.1bn.
The deal making took the level of commercial property transactions to more than $41bn and is a pointer to a healthy 2022.
Singapore-listed CapitaLand Integrated Commercial Trust has bought a half interest in the office tower at 101 Miller St and Greenwood Plaza in North Sydney from funds manager Nuveen for $422m.
The price shows how keen Singapore groups are to buy in Australia. It showed a yield of 4.9 per cent, based on its annualised income, in keeping with pricing before the pandemic struck.
Earlier this month the fund bought 66 Goulburn St in the Sydney CBD and 100 Arthur St in North Sydney.
The Miller St property comprises a 28-storey premium grade office tower but is also a bet on the retail recovery as Greenwood Plaza is expected to bounce back when workers return.
The deal also includes a $7m rental guarantee from the seller, in case of potential impact to tenants as a result of the Covid-19 situation.
The chief executive of the CapitaLand-run trust Tony Tan said it would “strategically augment our presence in Sydney, where we have embarked on acquiring 66 Goulburn St and 100 Arthur S”.
Mr Tan said the Sydney properties would provide CICT “with a new engine of growth in a developed market with strong fundamentals”.
The deal, via Knight Frank’s Ben Schubert, Tyler Talbot and Neil Brookes, and Colliers’ Adam Woodward, Lachlan Macgillivray and James Mitchell, was flagged by The Australian in September.
The 28-storey office component of 101 Miller St sports strong green credentials while Greenwood Plaza is expected to benefit from the return of workers and as new towers are built in North Sydney.
At the start of December Singaporean investors splashed out $1bn on top grade assets in about a week.
The companies are bullish Australian offices will be among world leaders in the return to work next year. They are also chasing retail assets.
In one of the largest deals, Charter Hall and Singaporean sovereign fund GIC teamed to acquire Canberra’s 50 Marcus Clarke office complex from Korean firm Mirae for $335m.
The purchase reflects a lift on the $321m that Mirae paid in 2017.
The deal showed GIC’s desire for local assets after it established a $750m venture with retail landlord SCA Property to own small shopping centres in metro locations.
Other Singaporean companies have also been active.
Lendlease last month tapped Singapore’s Keppel REIT to buy a boutique office development in North Sydney’s Blue St from Third.i Group.