Low Keng Huat (Singapore)

LKH sold all the offices in PLS but buy these offices in Jurong East . Better values in the west ?

(03-01-2014, 07:32 PM)opmi Wrote: Special div from paya lebar square 泡汤了。

I just hope they can maintain the same 4.5 cent dividend as last year. Otherwise I see the price dropping even more. At current prices, still a very decent 6.6%.

96 years strata title lease office space @ $1900 psf seems to me as the best alternative for recurrent income for the time being. Certainly better than buying residential land locally at current prices with the visible headwinds.

Owning 40% of the office space with a fund manager is a good way to reinvest the strong cashflow that is coming through.

It appears unlikely that the entire venture will be done with full cash.

With the Low family controlling more than 75% of LKH, it is unlikely that they will short change their own pockets in the next few years. Moreover, the partner who is a professional property fund manager probably have a stringent criteria for evaluating investments.

Vested
GG

I view this investment as positive base on:

1. now that the strong cash flow is invested they will not go out and bid for a residential project given the poor outlook of the residential mkt.

2. with this investment all the cash coming in will be deployed for recurring income to ensure strong div pay out in future. this was stated intent of mgt to get away from the cyclical construction/development projects

3. with not much cash left after this investment, there is less chance of a delisting. some may view this as negative but I view this as positive as mgt will not do a grab for the cash and offer a low price for it.

the only downside is that there might be a cut in div in this coming financial year. Now I am expecting maybe 3.5cents? even with 3.5cents it still gives a decent >5% yield.

Let's see what mr mkt says on Monday.

vested.

The Minton 4Q2013 TOP

Parkland Residences Upper Serangoon Crescent Dec 2014 TOP
Paya Lebar Square 3Q2014 TOP

560 Rooms Hotel @ Jurong 1H2015

Looks rosy till 2015?

No wonder one of my friends who works for CL, told me during recent new year eve that they won't be moving . Now I know the answer.

(03-01-2014, 10:12 PM)greengiraffe Wrote: 96 years strata title lease office space @ $1900 psf seems to me as the best alternative for recurrent income for the time being. Certainly better than buying residential land locally at current prices with the visible headwinds.

Owning 40% of the office space with a fund manager is a good way to reinvest the strong cashflow that is coming through.

It appears unlikely that the entire venture will be done with full cash.

With the Low family controlling more than 75% of LKH, it is unlikely that they will short change their own pockets in the next few years. Moreover, the partner who is a professional property fund manager probably have a stringent criteria for evaluating investments.

Vested
GG

Average office rental should be around S$7.50 psf for this project. Gross yield is 4.7%.

The 1.2m shares that was married on the mkt @ $0.68 was a "related party" transactions:

TanSriDato sold:

http://infopub.sgx.com/Apps?A=COW_Corpor...riDato.pdf

Dato' Marco bought:

http://infopub.sgx.com/FileOpen/20140129...eID=272961

Vested
GG

BT: Westgate Tower put up for lease by new owners

BYKALPANA RASHIWALA KALPANA@SPH.COM.SG PRINT |EMAIL THIS ARTICLE
WESTGATE Tower, a 20-storey office block next to Jurong East MRT Station that will be completed by year-end, is back on the leasing market after a Sun Venture-Low Keng Huat (LKH) tie-up recently exercised options to buy the property from CapitaLand group.
The consortium has appointed Jones Lang LaSalle (JLL) and CBRE as joint sole leasing agents for the office block.
Previously, JLL was the sole leasing agent appointed for the property by CapitaLand, CapitaMalls Asia and CapitaMall Trust, the developers of the Westgate mixed-development project. Early last month, the trio granted options to Sun Venture-LKH to buy the office tower at $579.4 million, which works out to about $1,900 per square foot (psf) of net saleable area. The options were exercised on Jan 23.
The previous owners had been indicating office rents of $8 psf a month at Jem but potential occupiers baulked at the rate, BT understands.
Yesterday, Sun Venture managing director Alvin Teo told BT that the new owners' asking rent is around $6.50 psf.
At The Metropolis, next to Buona Vista MRT Station, Ho Bee is said to have inked a number of office leases at $7-plus psf. It is now believed to be calling mid-$7 psf rents for the last pockets of space in the development, which has slightly over one million sq ft of net lettable area. The Metropolis' two towers were completed last year.
"Brand new business park space in the suburbs can be leased in the low-$4 psf range," said an industry observer.
Westgate Tower, a Green Mark Platinum building with Grade A office specifications, features efficient column-free space of about 17,000 sq ft per floor. This will allow occupiers to enjoy flexibility and efficiency in their office design, JLL said yesterday.
"There are many other key Grade A features such as a good floor-to-ceiling height of 2.8 metres, raised floor system and excellent quality finishes."
The seven-storey shopping centre in the Westgate project opened its doors in December last year.
At the next-door Jem project, also a retail-and-office project that has been completed, all 314,000 sq ft of office space has been leased to the Ministry of National Development, though the ministry has put up around 70,000 sq ft for subletting, according to an earlier BT report.
Nearby at Venture Avenue, Sim Lian is expected to begin strata sales of office units at its project in the first half of this year. Unit sizes will range from around 500-2,000 sq ft. The average price is expected to be around $2,000 psf.
All three developments are on 99-year sites.

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Potential in suburban office space

As more tenants move from pricier city centre, suppliers may do likewise

Published on Mar 15, 2014

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NOL is scheduled to move from its current Alexandra Road office to The Metropolis at Buona Vista in May. -- PHOTO; BUSINESS TIMES

By Rennie Whang

SUBURBIA may be the way to go when it comes to investing in offices.

As Singapore steps up the drive to decentralise, many office tenants have been moving away from the pricier city centre, Ms Christine Li, head of research at OrangeTee, observed in a report.

But as a result, the rental gap between central and fringe areas narrowed slightly, from a 14.4 price index gap in 2011 to 14.2 last year, she said.

She added that as mass-market residential home prices have moved ahead of office prices, there is room for fringe office prices to grow.

Following the end of the property trough in the second quarter of 2009 through to the fourth quarter last year, mass-market residential home prices shot up 73 per cent compared with fringe offices which have gained 53 per cent.

"It seems that fringe office prices are undervalued," she said.

She cited one-north in Buona Vista as an example of high-end, decentralised office premises.

"These buildings are new and are equipped with the latest technology, with attractive rental prices; that drew some tenants there."

With major tenants such as the Ministry of National Development and the Building and Construction Authority moving to JEM, suppliers of these government agencies may follow suit to be closer to them, she said.

"(The former) are considered quality tenants and their presence could enhance the property values in the vicinity, both in the residential and commercial segments."

Mr Alvin Teo, managing director of Sun Venture, which is developing Paya Lebar Square and owns Westgate Tower, said the potential of such outside central areas is in catering to many more SMEs for government agencies, and an even wider range of industries serving as suppliers.

"Westgate Tower caters to industries from medical and pharmaceutical, to shipping and the oil and gas industries, due to the accessibility to Jurong Health and Jurong Island respectively. The demand for pure office spaces from these industries has been strong due to accessibility and affordable options compared to the CBD," he said.

A spokesman for Neptune Orient Lines, scheduled to move from its current Alexandra Road office to The Metropolis at Buona Vista in May, said the firm chose it over CBD office spaces as "the office tower, which is within walking distance from the Buona Vista MRT station and surrounded by excellent recreational and retail amenities, is ideal for our needs".

NOL will be renting four floors at the Metropolis to house its corporate headquarters with 900 staff.

National Institute of Education's assistant professor in urban geography Diganta Kumar Das said decentralisation is not only efficient, but also achieves a more liveable community. "Not only does it bring jobs closer to home... people will also be saving more time when travelling to their offices," he said.

wrennie@sph.com.sg