MapletreeLog Q2 net up 25%

MAPLETREE Logistics Trust has achieved net property income of $57 million for the second quarter ended June 30, up 24.6 per cent from a year ago. Distribution per unit (DPU) came in at 1.6 cents, against 1.5 cents a year earlier.

Gross revenue for the latest quarter rose 26.6 per cent to $65.8 million on the back of contributions from completed acquisitions in Singapore, Japan and South Korea. This was further boosted by positive rental reversion and higher occupancy of 98.9 per cent, said Mapletree Logistics Trust Management Ltd (MLTM), manager of the trust.

Said MLTM CEO Richard Lai: ‘Despite the continued uncertain economic environment experienced in Q2 2011, MapletreeLog’s portfolio has demonstrated its resilience and robustness, delivering a strong set of results. Organic growth was also achieved through proactive asset management initiative which saw the conversion of a property in Singapore from single-user asset to multi-tenanted building in Q1 2011. Overall, the portfolio experienced organic growth of 5.1 per cent in Q2 2011 against Q2 2010.’

As at June 30, MapletreeLog’s portfolio comprised 99 properties with a book value of approximately $3.6 billion.

MapletreeLog said it continues to pursue its growth strategy with inroads having been made into South Korea. Besides South Korea, it said it continues to see acquisition opportunities in Singapore, Japan, China and Malaysia. It will also broaden its investment horizon to new markets.

Date: 22 July 2011 | For the full report, please visit http://www.businesstimes.com.sg

Mirvac in talks to sell properties to Aviva Asia

MIRVAC Group is in exclusive talks to sell four of its industrial properties to Aviva Asia for about $170 million and might form a strategic alliance with the global financial giant.

Should Aviva buy Mirvac’s assets, it will take the total value of transactions involving the sale of major Australian industrial portfolios to $3.56 billion since May last year.

Large overseas groups have been chasing domestic real estate because of the strength of Australia’s economy and its links to Asia, and locally listed groups have been selling industrial portfolios to focus on more lucrative sectors.

Aviva Asia is believed to have an exclusive due diligence arrangement until next month on Mirvac’s assets, including a half share of its $200m western Sydney Hoxton Park industrial development.

Aviva is believed to have briefly looked at Stockland’s industrial portfolio. Locally based 360 Capital recently agreed on a conditional basis to buy more than $200m worth of Stockland’s industrial assets.

Mirvac has said that it was searching for a capital partner for Hoxton Park, but would not comment on the latest speculation about Aviva.

Industry sources said Aviva — a financial firm based in London — was looking at the properties for its Singapore-based unlisted wholesale fund, the Aviva Asia Pacific Logistics Fund.

It is understood that the deal would include three completed, fully leased warehouses located in Villawood, Huntingwood and Minchinbury — all in western Sydney — for about $65m, in addition to the half stake of Hoxton Park, valued at about $107m.

Hoxton Park , the site of the former Hoxton Airport, will have about 140,000sq m of industrial space. Development is expected to be completed by the end of the year.

The distribution centres being built at Hoxton Park have been leased to Woolworths and Dick Smith for 25 years and 20 years respectively.

Mirvac expects the rate of return of the industrial park, when fully completed, to be higher than 18 per cent.

Sources suggest Mirvac is also in talks about forming a continuing strategic relationship with Aviva, where the group would have the first right of refusal on Mirvac’s future industrial developments.

Date: 21 July 2011 | For the full report, please visit http://www.theaustralian.com.au

A-Reit’s DPU down 5% with more units issued

ASCENDAS Real Estate Investment Trust (A-Reit) has reported a 4.4 per cent year-on-year rise in total amount available for distribution to $65.9 million for its first quarter ended June 30, 2011.

But the industrial Reit’s distribution per unit (DPU) dipped 5 per cent to 3.2 cents, mainly due to an 11.1 per cent increase in the number of units outstanding as a result of new units issued in the first quarter of this financial year. Gross revenue for the quarter ended June 30 grew 5.6 per cent year on year to $119.9 million, contributed mainly by new investments. But operating expenses were higher because of higher utilities cost, resulting in net property income rising just 1.6 per cent to $8.88 million.

The fiscal first quarter saw A-Reit’s occupancy rate rising to 92.5 per cent for its multi-tenanted properties and 96.2 per cent for its portfolio, up from 92.1 per cent and 96 per cent respectively.

‘Positive rental reversion was seen throughout all segments as a result of the improvement in the industrial rental market,’ said Tan Ser Ping, CEO and executive director of A-Reit’s manager Ascendas Funds Management (S) Ltd.

With improving industrial rental market, A-Reit could also benefit from leases that are up for renewal.

For the balance of the financial year ending March 31, 2012, the Reit has 10 per cent of its revenue due for renewal. The majority of these leases have passing rents that are below the existing market rents. Looking ahead, A-Reit expects global growth to moderate and Singapore’s economic outlook to remain positive in the second half of this year.

With its diversified portfolio as well as a good mix of properties with long and short-term leases, A-Reit expects to sustain its current performance.

Date: 19 July 2011 | For the full report, please visit http://www.businesstimes.com.sg

Ascendas Group eyes yuan Reit listing in HK

Property developer Ascendas Group plans to raise US$300-400 million by listing its three Shanghai commercial properties in Hong Kong via a yuan-denominated real estate investment trust (Reit), IFR reported.

The deal would be the second yuan-denominated initial public offering behind billionaire Li Ka-shing’s Hui Xian Reit, which raised about US$1.6 billion in March.

The company has hired JPMorgan Chase & Co and Standard Chartered Plc as joint global coordinators for the offer, while BNP Paribas SA and BOC International will act as joint bookrunners, IFR, a Thomson Reuters publication said, citing sources close to the deal.

Date: 08 July 2011 | For the full report, please visit http://www.businesstimes.com.sg

Prime factory and warehouse rents surge

RENTS for prime factories and warehouses shot up in the second quarter, posting the fastest quarterly growth in three years on the back of a healthy economy and a tighter industrial space supply.

Colliers International shared these findings in a report yesterday.

In Q2, the average monthly gross rent for prime ground-floor factory space rose 7.1 per cent over the quarter to $2.25 per square foot (psf).

The rate of increase exceeds Q1’s 3.4 per cent, and is the largest since Q1 2008 when rents jumped 11.8 per cent.

For prime ground-floor warehouse space, the average monthly gross rent spiked 6.4 per cent over the quarter to $2.34 psf in Q2.

The rate of growth surpasses Q1’s 4.8 per cent, and is the largest since rents increased by 13 per cent in Q1 2008.

‘Following the tightening supply of industrial stock, landlords have raised their asking rents to capitalise on the growing demand,’ said Colliers director of industrial services Tan Boon Leong. ‘Impending re-development plans of old industrial buildings, such as those in JTC’s Ayer Rajah Industrial Estate and The Comtech along Alexandra Terrace, have prompted businesses to search for new space for their operations.’

Demand for industrial space – some from qualifying companies looking to avoid high office rents – has also been growing, he said.

Activity in Q2 was strong not just in the industrial leasing market, but also in the sales market. Developers launched a number of projects, which include North Spring Bizhub in Yishun, Oxley Bizhub in Ubi and One Pemimpin at Pemimpin Drive.

Date: 07 July 2011 | For the full report, please visit http://www.businesstimes.com.sg

Mapletree Industrial Trust, Soilbuild win JTC properties

MAPLETREE Industrial Trust (MIT) and Soilbuild Group have secured over 300,000 square metres worth of industrial space from JTC Corporation at a combined price of $688.6 million, JTC said yesterday.

MIT took up the more expensive tranche – which consisted of 11 blocks of flatted factories and amenity centres – which was sold by JTC at $400.3 million.

The other tranche – comprising 10 blocks of flatted factories and amenity centres – was sold to Soilbuild for $288.3 million.

The factories are located mainly in places such as Kolam Ayer, Kallang Basin, Tai Seng, Bedok and Kampong Ubi.
This is the second divestment of industrial properties by JTC.

The first was finalised in 2008 when JTC sold 39 high-rise ready-built factories worth a total of $1.7 billion to Temasek Holdings’ unit Mapletree Investments.

According to an earlier BT report, at least five parties had submitted bids in the first phase of the two-stage tender process that closed in early March.

The contenders could bid for either or both tranches of assets and had to state their indicative bid prices for the respective tranche of assets, as well as listing their track record, financial strength and proposed business plans for the properties, among other things.

Date: 02 July 2011 | For the full report, please visit http://www.businesstimes.com.sg

Govt offers 9 industrial sites for sale in H2

THE government is making nine industrial sites available under the second-half land sales programme, keeping a steady hand on supply in the market.

The sites – three on the confirmed list and six on the reserve list – occupy a total land area of 15.99 ha, according to a release from the Ministry of Trade and Industry (MTI) yesterday.

Sites on the confirmed list are rolled out according to a schedule regardless of whether developers indicate interest.

Of the three plots on it, two are new. One is a 1.95 ha plot at Soon Lee Street and the other is a 2.83 ha plot at Lavender Street-Kallang Avenue.

The third site, occupying 2.6 ha at Kaki Bukit, was brought over from the first-half reserve list.

The sites are all fairly big, which ‘goes to show that the government thinks that the market can absorb this supply’, said Colliers International director (industrial) Tan Boon Leong.

Consultants’ top pick from the confirmed list is the site at Lavender. It stands out because of its location near Lavender MRT Station, and also because of its Business 1-White zoning.

In June, a Business 1-White industrial site at Irving Place attracted bids which were much higher than expected.

A development on the Lavender site could feature retail space on the ground floor, Mr Tan said. He believes that the site will be ‘hotly contested’.

Knight Frank director of business space (industrial) Lim Kien Kim suggests that the Lavender site could draw new players into the industrial property market.

With the government developing Kallang Riverside into a new suburban centre, demand for the site ‘will be strong’, he said.

Date: 01 July 2011 | For the full report, please visit http://www.businesstimes.com.sg

Tuas View Square industrial site sold for $7.3m by tender

THE Urban Redevelopment Authority (URA) tender for a 45-year leasehold industrial site in Tuas View Square closed yesterday with SCB Terraform Pte Ltd placing the highest bid of $7.33 million or $174 per square foot per plot ratio (psf ppr).

The site was launched for tender when an unnamed party submitted an application of $4.89 million.

The site has a site area of 46,850 sq ft, a plot ratio of 0.9 and thus a maximum gross floor area (GFA) of 42,163 sq ft.

A total of six bids were received by URA. SCB Terraform’s $7.33 million bid was 13 per cent higher than the second highest bid of $6.51 million or $154 psf ppr submitted by Soon Hock Property Development Pte Ltd and significantly higher than the application price of $116 psf ppr.

This price paid is notably higher than the $23 psf ppr paid for the last industrial site in Tuas sold under the Government Land Sales programme in February 2007. Located at Tuas Bay Drive/Tuas South Avenue, PTC Express Pte Ltd paid $9.09 million for the 60-year leasehold land parcel with a maximum GFA of 395,233 sq ft.

‘The lack of such smaller-size sites could have played a part in attracting a number of manufacturers and end-users to bid for the site. The total price, which is an affordable $7.33 million, also made the purchase of the site more palatable to these owner-occupiers,’ said Bernard Goh, director (industrial & logistic services) at CB Richard Ellis.

Date: 30 June 2011 | For the full report, please visit http://www.businesstimes.com.sg

Goodman raises $274m from Hong Kong property sale

GOODMAN Group has sold a half stake in the large Interlink industrial development in Hong Kong to the Canadian Pension Plan Investment Board for $274 million.

The $C148.2 billion ($142.8bn) pension fund will finance its share of the development until completion in January.

Interlink, a 224,000sq m warehouse and distribution centre in the Tsing Yi port district, is the first major logistics facility to be developed in Hong Kong in a decade.

Goodman chief executive Greg Goodman said the group’s Hong Kong Logistics Fund would hold the remaining 50 per cent of Interlink.

Asked about the profit margins on the project, Mr Goodman said: “We are right on target.”

JPMorgan property analyst Richard Jones said the project would have a very high margin of close to 50 per cent. “It would be good to have a few more projects like it but, unfortunately, there is not going to be a swathe of these.”
Mr Jones said Goodman managed to secure the land during the global financial crisis at a very attractive price.

CPPIB’s senior vice-president, real estate investment, Graeme Eadie, said it was a rare opportunity to acquire a significant interest in a prime industrial asset at the centre of Asia’s largest transport and logistics hub.

He said Interlink was well positioned to attract global tenants seeking a large-scale, modern facility in Hong Kong, where the supply of industrial space is severely constrained.

Mr Goodman said the group was seeking more Hong Kong development opportunities as part of its “greater China” strategy.

Date: 01 July 2011 | For the full report, please visit http://www.theaustralian.com.au

Woodlands industrial site draws top bid of $84.2m

AN industrial site at Woodlands Avenue 12 drew a top bid of $84.24 million – more than twice the per square foot price paid for a nearby site and much higher than market watchers had expected.

Analysts say this is a sign that funds are being diverted to the industrial property sector from the residential property market, which has been the target of numerous measures implemented by the government to keep prices in check.

The top bid was put up by OKH Development, and translates into a price of $152 per square foot per plot ratio (psf ppr) for the site – a 60-year-leasehold plot that measures 221,692.4 sq ft and has a 2.5 plot ratio.

This means the site has a maximum gross floor area (GFA) of 554,231.1 sq ft.

OKH’s bid is 10.1 per cent higher than the second highest bid of $76.48 million that was submitted by NSS Properties, which amounts to $138 psf ppr.

The site drew a total of nine bids, and is zoned for business 1 use.

Analysts had previously expected most bids for the plot to be within $60-90 psf ppr, with the top bid likely to be about $100 psf ppr. Colliers International director of industrial services Tan Boon Leong, who had previously anticipated the site to draw between four to seven bidders at the range of $60-90 psf ppr, noted that most of the bids for the land parcel were above $100 psf ppr.

‘It shows that the developers think the economy is doing well. The nine bids drawn also shows that they are confident that the end product will sell very well,’ said Mr Tan.

Date: 29 June 2011 | For the full report, please visit http://www.businesstimes.com.sg