AEW sells Rivervale Mall for S$230m to SC Capital Partners

Price for property in Sengkang reflects net yield of slightly over 4%

Wed, Mar 13, 2019


US-BASED property fund manager AEW has sold Rivervale Mall in Sengkang for S$230 million, BT understands.

The buyer is SC Capital Partners, a Singapore-based private equity real estate firm chaired by Suchad Chiaranussati, who is married to a niece of property and hotel tycoon Kwek Leng Beng.

The price works out to S$2,833 per square foot based on Rivervale Mall's net lettable area (NLA) of 81,193 sq ft. Based on the mall's existing leases, the price paid is understood to reflect a net yield of slightly more than 4 per cent.

Located at the corner of Rivervale Crescent and Rivervale Drive, the mall is on a site with 99-year leasehold tenure starting Dec 6, 1997; this translates to a balance land lease of nearly 78 years. The mall spans three levels and has an adjacent four-storey carpark podium with over 170 lots.

AEW bought Rivervale Mall in late 2015 for S$190.5 million from CapitaLand Mall Trust (CMT) and did some renovation works in the second half of 2016.

These included converting more of the shopping centre's lettable space to food & beverage (F&B) use. As well, flooring and lighting in the mall's common areas were spruced up.

Following the refurbishment, F&B tenants' share of Rivervale Mall's NLA expanded to 30 per cent from 20 per cent.

NTUC FairPrice is the anchor tenant, occupying about 22,000 sq ft. Tenants providing education, medical and beauty services each account for about 10 per cent share of the NLA.

Following its sale of Rivervale Mall, AEW will be left with three assets in Singapore, all in the Central Business District: Twenty Anson, 55 Market Street and the street-level unit at Prudential Tower.

In late-June 2018, AEW entered into a deal to buy Twenty Anson from CapitaLand Commercial Trust (CCT) for S$516 million. The price paid reflected S$2,503 psf on NLA and 2.7 per cent net property yield. Twenty Anson, near the Tanjong Pagar MRT Station, is on a site that had about 88 years' balance lease at the time.

In the following month, AEW clinched 55 Market Street, in the traditional Raffles Place financial district, from Frasers Commercial Trust for S$216.8 million

The 16-storey building is on land with 999-year leasehold tenure. AEW's acquisition price translated to S$3,020 psf on NLA and 1.7 per cent implied annualised net property income (NPI) yield based on the NPI for the property for the quarter ended March 31, 2018.

Nearby, in the Church Street/Cecil Street locale, AEW acquired the ground-floor space at Prudential Tower in 2017 for S$18.95 million or S$3,315 psf on strata area. The building is on a site which at the time had about 77 years' balance lease.

SC Capital has been in the news in Australia lately for unveiling the winning design for a new A$700 million (S$672 million) hotel and office joint-venture project in Sydney.

The 55-level tower, at 4 to 6 Bligh Street in the Sydney CBD, is expected to be completed in 2022.

Hyatt group has been selected to operated the hotel under its Andaz brand.