GuocoLand ropes in EPF for Tg Pagar project

[mr funny]

http://www.businesstimes.com.sg/sub/companies/story/0,4574,443649-1308340740,00.html?

Published June 17, 2011

GuocoLand ropes in EPF for Tg Pagar project

M'sian Employees Provident Fund buys 20% stake worth an estimated $640m

By UMA SHANKARI


GUOCOLAND, which is controlled by Malaysian tycoon Quek Leng Chan, yesterday said it has sold a 20 per cent stake in its upcoming $3.2 billion mixed-use development above Tanjong Pagar MRT station to the Employees Provident Fund of Malaysia (EPF).

The stake is estimated to be worth around $640 million. GuocoLand units will hold the remaining 80 per cent in the joint venture company set up to develop the project.

GuocoLand won the 99-year-leasehold plot in a government land tender in November last year with its offer of $1.708 billion or $1,006 per square foot per plot ratio (psf ppr). The $3.2 billion development cost includes the price of the land.

GuocoLand is required to allocate at least 60 per cent of the maximum 1.7 million sq ft gross floor area (GFA) to offices and another 10 per cent for hotel use.

In line with this, the development will potentially feature over a million sq ft of Grade A office space, a five-star hotel and retail space, as well as Singapore's tallest ever residences, which will reach a height of 280 metres.

The entire development will be completed in 2015 or 2016 but residential units could be launched as early as 2012, GuocoLand said in February this year.

The developer has also appointed Skidmore, Owings & Merrill (SOM) as the project's architects. SOM is the firm behind the world's tallest building, Burj Khalifa in Dubai, and the upcoming One World Trade Center in New York City. The firm also designed Singapore's Changi Airport Terminal Three.

EPF, a Malaysian pension fund, provides retirement benefits for private and non-pensionable public sector employees by managing their savings in approved financial instruments such as Malaysian government securities, money market instruments, loans and bonds, equity and property.

The new joint venture is not expected to have any material effect on the net tangible assets per share or earnings per share of the group for the current financial year ending June 30, 2011, GuocoLand said.

GuocoLand shares lost 12 cents or 5.7 per cent to close at $1.99 yesterday amid a broad market retreat.

[mr funny]

http://www.straitstimes.com/Money/Story/STIStory_680729.html

Jun 17, 2011

Malaysian fund to buy 20% stake in GuocoLand project

By Esther Teo, Property Reporter


MALAYSIA'S largest pension fund will buy a 20 per cent stake in the sky-high residential and commercial project being built in Tanjong Pagar.

The Employees Provident Fund of Malaysia (EPF) - which manages about US$149 billion (S$184 billion) worth of assets - could end up investing about $640 million in the $3.2 billion GuocoLand development.

Experts say the entrance of an institutional investor such as EPF suggests a strong vote of confidence for the office property market.

Cushman & Wakefield Singapore vice-chairman Donald Han told The Straits Times: 'Singapore is seen as a transparent market and is a natural progression out of Malaysia.

'I won't be surprised if this is not the last of such investors we see coming here and partnering with developers. It's better to just go across the Causeway than thousand of miles away.'

Mr Han also noted that such funds were likely to be confident about the good returns from the Singapore market while GuocoLand benefited by the sharing of development risk.

Savills Singapore's director of commercial leasing, Ms Agnes Tay, added that the site was likely to attract bigger tenants who were keen on longer leases, bringing rental stability and more stable yields. The site is an attractive one given the area's rejuvenation, although it is too early to predict the strength of the office property market in 2015, she added.

GuocoLand and EPF will form a joint venture with a paid-up share capital of $90 million. EPF will also provide a shareholders' loan of $95 million.

Malaysian firms have been making their presence felt in the real estate sphere recently.

IOI Corporation bought a 49.9 per cent stake in City Development's South Beach project earlier this year with its potential investment possibly costing as much as RM1.96 billion (S$798 million), some analysts estimate.

Khazanah Nasional and Temasek Holdings have formed a joint venture to develop sites in Marina Bay as part of a land swop deal stemming from the decision to move the Malayan Railway station.

GuocoLand's Tanjong Pagar site at the corner of Peck Seah and Choon Guan streets will be developed into a commercial, hotel and residential development with completion due in 2015 or 2016.

The project could soar to 78 storeys, or 280m, ranking it alongside Republic Plaza, UOB Plaza and the OUB Centre in Raffles Place as the tallest buildings in Singapore. There will be apartments on the top floors, which would make them the tallest homes in the country, putting the units at Far East Organization's 62-floor Altez in the shade.

GuocoLand, controlled by Malaysian billionaire Quek Leng Chan, paid a whopping $1.7 billion - or $1,006 per sq ft per plot ratio - for the site last November.