17 Jan 2011
Singapore, 17 January 2011 – NTUC Income, Singapore’s leading composite insurer, announced today an investment of about $101 million for a 49% equity stake in Savu Investments, the company holding 16 Collyer Quay and it comes at a time when the commercial real estate market is expected to continue its uptrend.
NTUC Income’s investment into this 999-leasehold office building translates into a purchase valuation of about $626 million or $2,250 per sq foot. This prime office property, which graces Singapore’s waterfront, has a net lettable area of 278,356 sq feet. The remaining 51% stake continues to be owned by an entity, the shareholders of which are funds managed by certain affiliates of Goldman Sachs and an indirect subsidiary of Goldman Sachs.
Alongside the equity investment by NTUC Income, Savu Investments also re-financed 16 Collyer Quay through a senior secured bond offering. ANZ was sole lead manager, underwriter and bookrunner for the bond offering, and was able to bring it to market in just under three weeks, capturing strong liquidity in the market in the opening days of the New Year.
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. The company currently owns several other office properties in Singapore.
NTUC Income’s Chief Investment Officer Peter Heng said the deal takes place at a time when office capital values in Singapore are still more than 25% off their peak levels in 2008.
“Singapore’s economic growth and scarce supply of freehold assets in the central business district lend buoyancy to the office investment property market, which is expected to lead to long term capital appreciation for prime-grade properties,” he said.
In addition, “this is an opportunity for NTUC Income to work with a global player like Goldman Sachs through this proprietary deal,” he said.
ANZ Head of Capital Markets Asia, Reuben Tucker, said: “ANZ Financial Institutions and Capital Markets team was able to meet Savu Investments’ complex financing needs by delivering a well-structured transaction and strong investor relationships to successfully complete the transaction.
“The process was among the swiftest in recent times for a property secured bond transaction of this size in Singapore. The offering closed with an oversubscribed and well-represented order book in just half a day.”