01 Mar 2006

Five bids for DBS Tampines Centre, Pavillion

Highest bid of $289m from Pramerica Asia entity: sources


THE combined tender for DBS Tampines Centre and the adjacent Pavillion complex near Tampines MRT Station has attracted five bids, with the highest of almost $289 million coming from an entity controlled by Pramerica Asia, sources say.

Pramerica Asia, formerly known as GRA Singapore, is said to have placed its bid on behalf of Asian Retail Mall Fund II, for which it is the fund and asset manager.

Its bid price works out to about $780 per square foot of potential floor area, including an estimated $10.8 million in development charges payable to the state to redevelop the combined site into a new mall with much more floor area than the two existing buildings together.

Analysts say Pramerica Asia's bid price works out to a breakeven cost of about $1,800 psf for a new mall. This assumes it does not top up the combined site's lease - the remaining tenure is about 83 years - to the original 99 years.

Based on this breakeven cost, it may be possible for Pramerica to achieve a net property yield of at least 6 per cent by the time the new mall is completed in about three years.

Outline provisional permission has been obtained to redevelop the combined site of about 90,700 sq ft into a five-storey shopping centre with three basements, with a 4.2 plot ratio (ratio of maximum gross floor area to land area).

Besides Pramerica Asia, other bidders for the properties may have included CapitaLand, Centrepoint Properties, Lippo group and Lend Lease, sources suggest.

DBS Tampines Centre was securitised by DBS Bank in 1999. The eight-storey block has shops in the basement and on the first and second storeys, and offices on the upper floors.

The four-storey Pavillion, owned by Cathay Organisation, was formerly used as a cineplex but is now leased for food and beverage, and entertainment use.

Knight Frank, which handled the joint tender for the two properties, declined comment yesterday.

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