Deka buys $545.5m Chevron House from Goldman Sachs

Germany’s Deka Immobilien has bought a Singapore office tower for about US$420 million ($545.5 million), broker Savills said on Tuesday, in a deal that crystallises a hefty loss on the price paid by owner Goldman Sachs in 2007.

“The transaction reflects a 30% discount from the peak pricing of 2007 and prime rental levels remain approximately 50% below their peak in 2007,” said Craig Ward, a director at global consultant Savills, which advised fund manager Deka.

A Goldman-linked property fund had bought Chevron House from Singaporean developer CapitaLand in September 2007, at a then-record price of $2,780 per square foot, or $730 million in total, local newspapers reported.

Savills said Deka, which bought the 262,650 square feet property at an initial yield of 4%, sees strong potential for rental growth and asset enhancements for the 29-storey tower located in Singapore’s Central Business District.

The consultancy said a number of other investors, in addition to Deka, are seeking assets in Singapore ranging from $50 million to $500 million, drawn by the city-state’s strong economic growth and recovery in its office market.

Singapore’s Prime Minister Lee Hsien Loong told Reuters in an interview earlier this month the city-state’s red-hot property market was a matter of concern and needed careful monitoring to avoid the creation of a bubble.

Goldman real estate funds have been offloading assets in Asia so far this year, and in August sold two other Singapore office blocks for $870.5 million to Overseas Union Enterprise, a firm controlled by Indonesia’s Lippo Group.

Source : The Edge – 16 Nov 2010

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