17 Jul 2012
Insurer significantly increases stake in real estate fund
Parkway Parade Partnership Limited (PPP)
Singapore, 17 July 2012 – NTUC Income, a leading Singapore insurer, has become Parkway Parade’s largest investor, after significantly raising its stake in Parkway Parade Partnership Limited (PPP), a real estate fund.
PPP owns Parkway Parade, the largest shopping centre located in the eastern part of Singapore and with direct access to the ECP. The six-storey building has 562,611 square feet of nett lettable space, at present almost 100 percent leased. Parkway Parade is popular with families and enjoys a good tenant profile that includes Isetan, Giant, Cold Storage and Marks and Spencer.
NTUC Income and PGGM Private Real Estate Fund (PGGM), an investment vehicle for Dutch pension funds, are cornerstone investors of PPP. NTUC Income recently raised its stake from 22% to 46% while PGGM has retained its 33% stake. The total value of Parkway Parade is over S$1 billion and translates to about S$1,888 per square foot.
Peter Heng, Senior Vice President and Chief Investment Officer, NTUC Income said, “NTUC Income has been actively diversifying our investment portfolio over the last five years and our appetite has increased for real estate investments with a track record of strong income yields. Parkway Parade is a great example of the kind of commercial property asset that is going to provide a stable cash return over the long-term. It fits in nicely with our broader strategy in the current market environment.”
Real estate management group Lend Lease will continue to serve as the fund’s investment manager and the property manager for Parkway Parade. The fund has an investment strategy to maximise value through active asset management.
Mr. Heng added, “Working with our co-investors and property manager, we will embark on a variety of asset enhancement initiatives to further enhance Parkway Parade’s appeal to tenants and customers and increase its rental yield and asset value over time.”
PPP has delivered to its shareholders about 18% per annum returns since its inception and made achievements in sustainability. Last year, PPP was ranked the number one private fund in Asia (out of 49 respondents active in private real estate in Asia) in the 2011 Global Real Estate Sustainability Benchmark (GRESB). GRESB has been established to assess the relative environmental and social performance of public and private real estate funds and companies. In 2010, Parkway Parade received the BCA Green Mark Platinum Award for Existing Buildings from the Building and Construction Authority of Singapore (BCA). Parkway Parade was one of the first mixed-use developments in Singapore to achieve the award, the highest recognition under the BCA Green Mark rating system.