Straits Trading Company

Straits Trading buys Suntec Reit units
Published on May 5, 2014 12:50 AM


Suntec Reit's underlying portfolio includes office and retail units in Suntec City (above) and Marina Bay Financial Centre, among others. -- ST FILE PHOTO

THE Straits Trading Co, which is actively seeking new investment opportunities in real estate, has acquired a small stake in Suntec Real Estate Investment Trust (Suntec Reit).

The real estate, hospitality and mining group said its subsidiary Straits Real Estate bought 35.1 million Suntec Reit units in a series of transactions for $60.2 million or about $1.72 each. They represent 1.4 per cent of all outstanding Suntec Reit units.

Straits Trading said in a statement that the purchase was in line with its stated intention of deploying capital into suitable real estate-related opportunities.

"The board is of the view that the market acquisitions represent an investment in a liquid Singapore-focused Reit at an attractive entry price," said the firm, noting that the average purchase price worked out to a discount of 17.3 per cent to Suntec Reit's book value as at March 31.

Suntec Reit's underlying portfolio comprises office and retail properties in Suntec City, Park Mall, a one-third interest in One Raffles Quay and a one-third interest in Marina Bay Financial Centre Towers 1 and 2 and the Marina Bay Link Mall.

The investment is intended to be a "long-term investment and strengthens the company's real estate eco-system by giving it an interest in Suntec Reit which is managed by ARA Trust Management (Suntec), a wholly owned subsidiary of ARA Asset Management".

Straits Trading executive chairman Chew Gek Khim said the company has set aside funds to pursue "Blackstone-like" investments in real estate, shortly after the firm announced it was investing in a 20.1 per cent stake in ARA Asset Management for $294.4 million. The Blackstone Group is the world's biggest manager of alternative assets including real estate.

Straits Trading is now the single largest shareholder of the listed property trust manager.

As part of the deal, ARA Asset Management will manage Straits Trading's entire investment property portfolio, excluding its hospitality assets.

That portfolio includes the Straits Trading Building, nine good-class bungalows, 13 units in the 38-unit Gallop Green condominium, 14 units in the 26-unit The Holland Collection and some properties in Malaysia.

Suntec Reit units rose 3.5 cents to $1.75 last Friday, before the purchase was made public.

No logic... buy suntec reit at such price...

Recently vested in this.
Just looking for dinosaur counters to buy and sleep.

Hopefully it becomes another HPL, UIC, etc... in the long run.

No worries, this dino wont go extinct anytime soon. They have transformed. The last that they did was to make UE / OCBC / GE / Lee family pay for WBL.

However, they have since offload their own assets in a bid to grow bigger by tapping on others expertise / platform.

Not that there is anything wrong but in the process, they have also paid a fair mkt price for others expertise / platform.

So now they have become a holding co whose fate lies in others hand.

Wrong term they will be fine but if you are looking for some more treasures - you will end up finding financially engineered products...

Odd Lots
Vested
GG

(21-05-2014, 07:51 PM)orangetea Wrote: Recently vested in this.
Just looking for dinosaur counters to buy and sleep.

Hopefully it becomes another HPL, UIC, etc... in the long run.

http://www.businesstimes.com.sg/premium/...g-20140826

PUBLISHED AUGUST 26, 2014
Deal brewing for Straits Trading Building
Price may be slightly over S$2,800 psf, highest for an office block in six years
BYKALPANA RASHIWALA
kalpana@sph.com.sg @KalpanaBT

Grade A location: The 28-storey office tower is a redevelopment of the original 21-storey block on the site built in 1972. - PHOTO: ARTHUR LEE
[SINGAPORE] Amid the quiet investment sales market this quarter, a major office deal is brewing. Advanced discussions are believed to be going on for the Straits Trading Building, a landmark 999-year leasehold office tower in Battery Road.
The price is understood to be slightly above S$2,800 per square foot (psf) based on the net lettable area (NLA) of about 159,000-plus sq ft, which would translate to a transaction size of about S$450 million. The buyer is said to be an overseas party, from Asia. The net yield could be around 3 per cent.
Market watchers noted that the slightly over S$2,800 psf pricing based on ongoing negotiations would be the highest for an office block in six years, since the record S$3,125 psf achieved for 71 Robinson Road in April 2008, while it was still under construction. At the time, 71 Robinson Road's site had a balance lease term of about 85 years.
Straits Trading Building is nearly fully let, with law firm Rajah & Tann as its anchor tenant. Completed in 2009, the 28-storey building is a redevelopment of the original 21-storey block on the site that was built in 1972.

http://www.businesstimes.com.sg/premium/...m-20140906

PUBLISHED SEPTEMBER 06, 2014
Sun Venture buys Straits Trading block for S$450m
Price of some S$2,800 psf said to be a 6-year high for an office block
BYJOYCE HOOI
joyceh@sph.com.sg @JoyceHooiBT

IT'S A DEAL
Straits Trading is selling the building to unlock value and to transform its real-estate business into an engine of growth. It expects an estimated capital gain of S$39m based on the latest book value of the property and S$373.3m based on its historical cost. - PHOTO: ARTHUR LEE
Singapore
THE Straits Trading Company is selling its office tower, Straits Trading Building, to Singapore-based Sun Venture Group for S$450 million.
The announcement of the sale agreement on Friday came shortly after BT first broke news of an impending sale of the Battery Road property. BT had reported that the building owner was in advanced discussions on the sale of the building for a price of slightly above S$2,800 per square foot (psf) which, at a net lettable area of about 159,000-plus sq ft, had worked out to a price tag of S$450 million for the 999-year leasehold building.
The sale announced on Friday is part of Straits Trading's move to reallocate capital from its portfolio of investment properties which are high in quality but low in yield to "potentially higher return real estate opportunities", the company said.

How come ARA or its REITS don't want?


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(06-09-2014, 11:54 PM)opmi Wrote: How come ARA or its REITS don't want?


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ARA is an asset manager not an asset owner. It would not be buying. As for its REITS, the BT article states that "the net yield could be around 3 per cent." 3% yield is a good price to sell. It is not normally a good price to buy, unless the current rent is depressed or there are opportunities for asset enhancement etc.

Raising more cash to average down on Suntec REIT shares?

Another case of company selling key assets, like it or not market are favouring asset-light cash rich companies these days.

I agree orangetea, if it turn out to be good it will be HPL, UIC just to name a few.. I am also looking at Haw Par (value) But if it doesnt, It may end up like Wheellock maybe lousy strategic acquisition.

If the management rationale to offload their building to counter bid UE like what GG has shared previously, then I'ill rather be in UE.

Still to early to say, what they gonna do twith their money.