18 Mar 2011
Singapore, 18 March 2011 – Alpha Investment Partners Limited (AIP), through its US$1.2 billion Macro Trends Fund (AAMTF), and NTUC Income, have entered into an agreement to jointly acquire the Grade A office development Capital Square for an investment consideration of about $889 million.
This works out to approximately $2,300 psf for the prime property, which has a net lettable area of 386,525 sq ft. The Australia and New Zealand Banking Group Limited (ANZ) is the sole arranger for the financing of this transaction.
Located in the heart of Singapore’s CBD, Capital Square is a 16-storey Grade A office tower with two rows of heritage shophouses. It is the preferred business address for financial institutions and multinational corporations such as Bloomberg, Citibank and Morgan Stanley.
Capital Square boasts one of the largest column-free office floor plates of between 25,000 and 30,000 sq ft in Raffles Place. The building is well-designed with quality mechanical and electrical specifications, and has ample parking lots to meet the demand of its tenants.
Developed by Keppel Land Limited (Keppel Land), Capital Square has garnered numerous accolades including the SIA Façade Design Excellence Award, the Architectural Heritage Award by the Urban Redevelopment Authority, as well as the Certificate of Merit for Construction Excellence and Best Buildable Design by the Building and Construction Authority (BCA) of Singapore. It was also awarded the Green Mark Award in 2009 by BCA for its environmentally friendly features and practices.
AIP, the wholly-owned real estate fund management arm of Keppel Land, will be the asset manager for the joint venture partners upon the completion of the acquisition. Both AIP and NTUC Income also have plans to further enhance Capital Square through various asset enhancement initiatives to maintain the property’s competitive edge.
NTUC Income’s move to buy 50% of Capital Square comes weeks after it paid $101 million for its 49% stake in 16 Collyer Quay, prime office property, which graces Singapore’s waterfront. As Singapore’s leading composite insurer, NTUC Income is a long term player in Singapore’s real estate market as such investments enable the insurer to generate sustainable and stable returns for its policyholder base.
NTUC Income currently owns retail, office and industrial properties in Singapore. Its property portfolio includes ownership stakes in sub-urban retail malls, such as Ang Mo Kio Hub and EastPoint Mall, and six office buildings, including NTUC Income Centre and 16 Collyer Quay. NTUC Income has been a player in the office investment market for some time, having also previously owned a significant stake in Chevron House (formerly called Caltex House).
Incepted in 2007, the AAMTF is a real-estate fund focused on prominent trends across Asia in markets including Singapore, Japan, Taiwan, South Korea and Hong Kong, as well as the fast emerging markets of China, India and Vietnam. The investors of AAMTF have been pleased with the Fund’s performance, particularly with AIP’s discipline in not over committing the Fund during the early stages of the global financial crisis and having the courage to invest in early-2009 across key Asian markets when fear ruled the markets.
Following the success of AAMTF, which has achieved a return of 24% p.a., AIP will be launching a follow-on fund.
The AAMTF’s portfolio of properties includes the redevelopment of Katong Mall and private residential developments in Singapore’s prime residential districts [to be rephrased as - residential units in several prime developments in Singapore]; a serviced apartment portfolio and hotel in Hong Kong; an airport hotel at South Korea’s Incheon Airport; prime office buildings in Seoul’s key business districts; commercial buildings in Tokyo’s Shibuya District; a serviced apartment cum retail development in Manesar, South of New Delhi as well as an office cum retail development and a portfolio of residential units in Shanghai.