Several parties holding talks over sale of KeyPoint

Business Times: Thu, Oct 20
AN expression of interest exercise for the sale of KeyPoint at Beach Road is said to have closed late last month and a few parties are currently holding discussions. The asset was valued at $283 million as at the end of June this year. The existing…
AN expression of interest exercise for the sale of KeyPoint at Beach Road is said to have closed late last month and a few parties are currently holding discussions.

The asset was valued at $283 million as at the end of June this year. The existing 25-storey development, at the corner of Beach Road and Jalan Sultan, is a full commercial property. It comprises a three-storey podium, 22-storey office tower and four-storey car park with 227 lots. Close to 90 per cent of the net lettable area of 311,892 sq ft comprises offices, with retail space making up the rest.

In August, Frasers Commercial Trust revealed it had obtained outline planning permission to redevelop the site to a commercial and residential project with a 5.0 maximum plot ratio, which would allow the new development to have a maximum gross floor area (GFA) of about 391,209 sq ft. At least 60 per cent of the GFA must be for residential use, while the commercial portion can be 20-40 per cent of GFA.

In September, Frasers Commercial Trust revealed that Singapore Land Authority had granted in-principle approval to top up the site’s lease to a fresh 99-year term. The site has a remaining lease term of about 63 years.

In addition to paying a lease upgrading premium, the developer of the site will also have to pay a differential premium to the state for enhancing the site’s use. The site will also have to be rezoned from commercial use to mixed commercial and residential use.

CB Richard Ellis is said to be handling the expression of interest exercise for KeyPoint.

According to statutory filings made by Frasers Commercial Trust, KeyPoint generated gross revenue of $4.09 million for the quarter ended June 30, 2011, reflecting an increase of 9 per cent over the same period last year. Net property income rose 8 per cent year on year to $2.86 million. On an annualised basis, this would translate to a net yield of just over 4 per cent based on the $283 million valuation.

The existing KeyPoint was built in 1978 and a $35 million refurbishment completed in early 2000. Allco Commercial Real Estate Investment Trust bought the property in 2007 for $370 million. In 2008, Frasers Centrepoint Limited bought a stake in Allco Commercial Reit, which was then renamed Frasers Commercial Trust.

On the stockmarket yesterday, Frasers Commercial Trust closed 3.5 cents lower at $1.42.

Source: Business Times © Singapore Press Holdings Ltd.

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