Source : Straits Times – 11 Nov 2009
A JOINT venture between Singapore Press Holdings, NTUC Income and NTUC FairPrice has topped the tender for a mall at Clementi Town Centre with a bid of $541.9 million.
This is nearly 42 per cent above the se-cond-highest bid of $382 million from a venture between Keppel Land’s Alpha Investment Partners and Guthrie.
The top bid was submitted through CM Domain, which is 60 per cent owned by SPH’s Times Properties, with 20 per cent stakes held by NTUC Income and NTUC FairPrice.
Frasers Centrepoint was third, with a bid of $352.1 million, followed by Capita-Mall Trust at $338.8 million and Lend Lease Retail Investments 3 at $303.3 million. Sim Lian Holdings was last with a bid of $170 million, according to the Housing Board yesterday.
The 99-year leasehold mall at the junction of Commonwealth Avenue West and Clementi Avenue 3 has direct links to the Clementi MRT station. It is part of a larger development being built by the HDB comprising two 40-storey blocks of flats, a two-storey carpark serving 388 HDB flats, a roof garden and a bus interchange.
The Clementi mall will occupy basement one, the third and fourth floors as well as part of the fifth storey. A library will take up 1,975.7 sq m on the fifth floor and there is a carpark at basement two. Levels one and two are for the air-conditioned bus interchange. Total gross floor area is about 25,000 sq m while the net floor area is up to 18,000 sq m.
CM Domain will need to fit out the mall as the HDB is building only the shell structure. Property consultants estimate the fit-out cost at $40 million to $50 million. That would put the top bid at around $3,000 psf of retail net floor area.
Consultants said this could be a record level as the price of suburban malls has generally not crossed $2,500 psf.
Jones Lang LaSalle’s head of investments, Ms Stella Hoh, said CM Domain could be looking at an average rent of $16 to $17 psf, assuming a capitalisation rate of 5.5 per cent and a $50 million fit-out cost.
Knight Frank’s managing director Danny Yeo said it depends on the expected returns. ‘If they are looking at a net yield of 4 to 4.5 per cent, the achievable rent is $14 psf. But if they are expecting returns of 5.5 to 6 per cent, they would need to do close to $18 psf.’
An SPH spokesman said the company decided to bid for the mall because it is in a good catchment area and there are not many shopping centres nearby.
‘Suburban malls are well patronised, with resilient rentals and sustainable income,’ he said yesterday. The property is in a high traffic area due to the integrated transport amenities and the business will provide a solid and steady income stream to the joint-venture parties, he added.
Colliers International’s executive director (investment sales) Ho Eng Joo said students from nearby institutions like the National University of Singapore and Ngee Ann Polytechnic like to gather in the area.
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