Singapore’s NTUC Enterprise Co-operative Ltd is set to sell the majority of its property portfolio in Singapore with its property arm marketing 4.15 billion Singapore dollars ($3 billion) in suburban shopping malls at the same time as its insurance division is considering offers for at least one office tower in the city, Mingtiandi has learned.
The union federation’s real estate arm, Mercatus Co-operative, has contracted JP Morgan to market its 2.13 million square foot (197,880 square meter) portfolio of four shopping centers for an undisclosed amount, including a half- stake in a shopping mall he co-owns with PGIM Real Estate, China’s CIC and a unit of Prudential, according to people familiar with the talks, which were first reported by Bloomberg.
In a separate transaction, NTUC Income, the co-op’s insurance arm, this month completed a tender for its 37-storey Income at Raffles office tower. This process attracted bids from 10 players, with the top bid being over 950 million Singapore dollars ($687 million), based on an account from the Business hours. Competitors in this competition included a joint venture between BlackRock and City Developments Ltd, as well as local private equity firm TE Capital, Mingtiandi learned.
If Mercatus succeeds in selling its shopping center portfolio, the disposal would rank as Singapore’s largest real estate deal so far this year, with a reported amount equivalent to nearly half of the S$9.9 billion of properties that have changed hands since January, according to independent sources. to research.
Mall heavyweight wants out
Deliberations on the potential sale of the mall’s portfolio are still ongoing, but the assets could fetch around S$4 billion Bloomberg reported late Thursday, citing unnamed sources. annual report 2021.
The four malls are at least 99% occupancy and generated S$323.7 million in combined revenue last year, down 4.5% from the S$339 million generated by the portfolio before the pandemic in 2019.
Considered one of the largest suburban shopping mall complexes in Singapore, the biggest asset in Mercatus’ portfolio is Jurong Point, a S$2 billion shopping mall located in the western part of the city-state which s covers 720,000 square feet of net leasable area.
The S$1.96 billion NEX mall in Serangoon district is the second largest on the list by valuation, where it has a 50% stake alongside its partners PGIM Real Estate, the Chinese sovereign wealth fund CIC and a subsidiary of the American giant Prudential Financial.
The portfolio also includes the large 320,000 square foot AMK hub which connects directly to Ang Mo Kio MRT station and was valued at S$846 million last year, as well as the Swing By @ Thomson Plaza shopping mall in S$203 million on Upper Thomson. Road that spans 110,000 square feet in NLA.
Mingtiandi has reached out to representatives of JP Morgan and Mercatus for comment, with neither party responding at press time.
The head office is ready to stay
While Mercatus markets its entire retail portfolio, it is more selective in disposing of its office assets as Lion City experiences a boom in demand for office space.
Market sources said Mercatus plans to keep its One Marina Boulevard property downtown, a 31-story building that serves as the headquarters of the property manager as well as its parent company, NTUC Enterprise.
Also referred to as the NTUC Centre, One Marina Boulevard is located near the Raffles Place MRT station and is home to tenant businesses including law firm Allen & Gledhill.
The fate of Mercatus’ sole Australian property, 1 Bligh Street in Sydney, appears more uncertain.
After partnering with Australian Dexus to jointly buy a 33.3 stake in the 29-storey downtown office tower for A$375 million (then $288.1 million) in March Last year, market sources informed Mingtiandi that Mercatus intended to retain its only Down Under asset. However, a report from Business hours said JP Morgan is also assessing interest in a potential sale of 1 Bligh Street.
While the co-op plans to sell its properties en bloc, it has yet to take any public action on its portfolio of titled strata assets, which measure 360,000 square feet of net leasable area. Spread across 33 locations, these strata assets generated S$30.8 million in total revenue last year and were valued at S$437 million at the end of 2021.
With more than S$10 billion in assets under management, the cooperative saw its profit attributable to its members drop by 10% to S$53 million last year, from S$58.6 million in 2020, in part due to the continued impact of pandemic-induced travel restrictions on its retail holdings.
“With many of our tenants affected by the various COVID-19 measures and restrictions, we have provided them with targeted leasing, operations and marketing support to help them through this difficult time,” said Mercatus Chairman Soong Hee Sang. company annual report. “We can all expect steady recovery and growth in 2022 as Singapore transitions to living with COVID-19.”
Active Offices Near Sale
While its sister company is busy looking for new owners for its malls, industry sources told Mingtiandi that NTUC Income is set to sell its office tower at 16 Collyer Quay in Raffles Place and its 11-storey Prinsep House commercial building near Bencoolen MRT station has also received offers.
Raffles’ earnings received bids of around S$950 million in the closed expression of interest exercise that ended earlier this month, according to the Business Times, an amount that translates by S$3,436 per square foot of its 276,450 square feet of leasable area.
The 999-year-old leasehold property garnered 10 bids, with sellers having since narrowed the field to just three shortlisted bidders, including CDL-BlackRock JV, Chinese investment firm Bright Ruby Resources and Sukanto Tanoto, an Indonesian tycoon who founded the Royal Golden Eagle (RGE) group conglomerate which bought the Tanglin Shopping Center in February this year.
Other reported bidders were SGX-listed builder GuocoLand, a combination between TE Capital Partners and KKR, and a joint venture Angelo Gordon-TCRE Partners.
Located in the heart of Singapore’s central business district with direct access to Raffles Place MRT station, NTUC Income first purchased a 49% stake in the building for S$101 million in 2011 and later transitioned to buy the remaining stake in 2013 for S$660 million.
According to market sources, the insurer has also received offers for Prinsep vintage 1992 for an undisclosed amount. This 47,215 square foot property is part of an NTUC Income office portfolio that also includes NTUC Income Tampines Junction and NTUC Income Tampines Point in northeast Singapore.
One MRT stop east of Prinsep House, another Singapore office tower is under negotiation.
Industry sources confirmed to Mingtiandi that Hong Kong’s Baring Private Equity Asia (BPEA) is in sole due diligence to buy the 24-storey Parkview Square office building for S$900 million, confirming earlier reports.
Company representatives declined to comment on the reported discussions.