NTUC Income has paid $101 million for a 49 per cent equity stake in Savu Investments, the company holding 16 Collyer Quay previously known as Hitachi Tower.
This transaction values the 999-leasehold office building at about $626 million or $2,250 per sq foot. The prime office property, located near the waterfront in the Collyer Quay area, has a net lettable area of 278,356 sq feet.
NTUC Income said yesterday that the remaining 51 per cent stake in Savu Investments continues to be owned by an entity, the shareholders of which are funds managed by affiliates of Goldman Sachs and an indirect subsidiary of Goldman Sachs.
Savu Investments has also re-financed 16 Collyer Quay through a senior secured bond offering. ANZ was sole lead manager, underwriter and bookrunner for the bond offering. The bank was able to bring it to market in just under three weeks, capturing strong liquidity in the market in the first few days of the new year.
ANZ head of Capital Markets Asia, Reuben Tucker, said: ‘The process was among the swiftest in recent times for a property secured bond transaction of this size in Singapore. The offering closed with an oversubscribed and well-represented order book in just half a day.’
NTUC Income said its investment takes place at a time when the commercial real estate market is expected to continue its uptrend.
Peter Heng, its chief investment officer, said the deal comes at a time when office capital values in Singapore are still more than 25 per cent off their peak levels in 2008.
The deal was also a chance for NTUC Income to work with a global player like Goldman Sachs, he added.
NTUC Income currently owns several other office properties in Singapore, says that it is a long term player in Singapore’s real estate market as such investments enable the insurer to generate sustainable and stable returns for its policyholder base.