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SINGAPORE'S biggest suburban shopping centre, Jurong Point, has been put up for sale with a price tag exceeding S$2 billion.
This works out to more than S$3,000 per square foot based on the commercial net lettable area of about 658,000 sq ft that is being offered for sale by an equal joint venture between Guthrie GTS and Lee Kim Tah Holdings, both of which have been delisted.
At over S$2 billion, the price tag translates to a sub-4 per cent net yield, Michael Leong, director of sole marketing agent Array Realty, told The Business Times.
Array in turn is working exclusively with JLL to conduct an expressions of interest exercise that will close on Nov 18.
Guthrie and Lee Kim Tah are divesting a total net lettable area of 702,000 sq ft - including 44,000 sq ft of space under the government's Community/Sports Facilities Scheme (CSFS) which is currently being used by occupiers such as NTUC First Campus Co-operative's My First Skool and voluntary welfare organisations.
There is a further space of about 59,000 sq ft under three strata retail units divested by Lee Kim Tah and Guthrie about two decades ago to Golden Village, NTUC FairPrice and POSB - taking the total net lettable area in Jurong Point to 761,000 sq ft.
Guthrie and Lee Kim Tah are offering their 702,000 sq ft in the mall through the sale of shares in companies that own this space. "The two partners have owned the property for many years and want to look at pursuing new interests and opportunities," said Mr Leong. Lee Kim Tah was delisted in early 2015 and Guthrie in November 2013.
Most stockmarket analysts would think that a net yield of 3-plus per cent based on Guthrie and Lee Kim Tah's asking price is too low to make for a yield-accretive acquisition by Singapore mall Reits (real estate investment trusts).
However, JLL regional director of Singapore capital markets Anthony Barr expects Jurong Point to appeal to a broad range of other institutional investors including sovereign wealth funds, pension funds and insurance groups.
"Rarely do stabilised assets of this scale become available. There have been no comparable sales of a suburban retail property of this size on the open market for more than a decade in Singapore's tightly held retail sector; other large sales have been either related party transactions involving listed Reits or sales of partial interests."
A high-performing mall, Jurong Point is regarded as "fortress retail", he added. "This, combined with the dynamic growth planned for the Jurong district, will ensure a broad range of interest at the indicated pricing."
Jurong Point is seamlessly linked to the Boon Lay MRT Station and Bus Interchange. It currently draws an average monthly visitorship of six million and has a catchment of 150,000 households within a five-km radius, with potential for growth as the new town planned in Tengah is progressively developed.
Major tenants for the space at Jurong Point owned by Guthrie and Lee Kim Tah include FairPrice Xtra, Courts, Harvey Norman, Uniqlo and Kiddy Palace in addition to three foodcourts. Joining their ranks soon will be BHG, which will open a nearly 50,000 sq ft department store on three levels in December; part of this space was previously occupied by John Little.
The mall is nearly fully let.
Jurong Point stands on two sites; one has a balance lease term of about 76 years and the other, 89 years. Their combined land area is 557,288 sq ft.
The original Jurong Point was completed in 1995 and spans four levels of retail space (Basement 1 to Level three). The CSFS space is on Levels 4, 5 and 6.
The extension, which was completed in 2008, has three retail floors - Basement 1 and Levels 1 and 3.
About 1,000 carpark lots in Jurong Point are available for use by shoppers.
The mall's total gross floor area (GFA) is 1.07 million sq ft; there is no unutilised GFA.