In 2010, Perennial formed a consortium to buy Chinatown Point for S$250 million. The retail mall was then given a S$91 million redevelopment.ACTIVITY in the commercial property investment segment appears to be picking up, with Chinatown Point mall becoming the latest to change hands this year.
Perennial said the transaction is in line with its active capital recycling strategy to rebalance its portfolio, enhance financial flexibility and maximise shareholders' returns. Perennial is the largest investor in Chinatown Point, with a 50.64 effective interest; its proportionate net proceeds is expected to be about S$125.3 million, subject to final adjustments.In a separate regulatory filing, SPH said it expects its share of gain to be about S$10 million.
Karamjit Singh, senior consultant at JLL, said the flurry of activity in the commercial market is driven by optimism in the office rental market."While office space rents have moved up over the last two years, the consensus is they have yet to peak. Potential withdrawal of stock in the form of old office buildings for redevelopment in the CBD could also add to the momentum. This is in reaction to the latest plans announced by the Urban Redevelopment Authority to rejuvenate the CBD.
Most recently, M+S also placed DUO office tower on the market, with an asking price of S$1.6 billion; Frasers Property said it is in talks to sell Frasers Tower. DBS analyst Derek Tan noted that transaction volume in the commercial property space is expected to remain robust, with an upward trend in sight. The key reason is that these investments are purchased by funds, and there is demand to deploy capital in Singapore as the commercial market is generally quite liquid, he told BT.
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