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JOHN HANCOCK TOWER
6 Raffles Quay
Singapore 048580 |
Three floors sold at John Hancock Tower
2004 - Three floors at John Hancock Tower
have been sold for $21-22 million, or $700-750 per square foot of net floor
area.
This is the third major office deal in a
month against a backdrop of bottoming office rents.
BT understands that the 18th to 20th
storeys at the freehold office tower were sold to a real estate investment
firm. The 20th storey, which belonged to John Hancock, was sold for around
$750 psf while the 18th and 19th floors were sold at prices above $700 psf,
sources said.
French bank Calyon had placed the two
lower floors up for tender. US-based John Hancock has recently completed its
merger with Canadian insurer Manulife Financial Corp.
Each level has a net floor area of 10,130
sq ft.
Property consultants say that while John
Hancock Tower is in a Grade A location, it is not a Grade A building.
'The price seems a bit on the low side
but there are things that need to be considered,' said FPDSavills' Wallace
Chu.
'The building is one of the better
buildings for sale in strata title terms in the Raffles Place area with some
sea-facing view. Yet the view may not be guaranteed for long with the
completion of One Raffles Quay nearby.'
Mr Chu said the price was likely to
include a bulk discount and give a yield of around 5 per cent based on
current rents of $3.30 psf.
While the office sector is seeing a
bottoming out of rents and increased investment activity, the prices fetched
at John Hancock Tower are the lowest in the building's history.
The last transaction for John Hancock
Tower was in July 2003 for the 14th floor at a price of $8.6 million or
$803.52 psf, according to caveats lodged with SISV Services. In 2002, the
21st and 22nd floors were sold for $930 psf.
According to a Cushman and Wakefield
report, Grade A office values in the Raffles Place area fetched $924 psf in
Q2, down 0.4 per cent from Q1. Compared with a year ago, values are down 5.7
per cent and are 41.9 per cent lower than at the recent peak in March 2001.
Last week, Sinsov Building, which has been on the market for at least two
years, was finally sold for $34.1 million, or $641 psf of net lettable area.
The 999-year leasehold building is
opposite the Golden Shoe carpark. In August, Ferrell Asset Management bought
MCL Land's 99-year leasehold 78 Shenton Way for $151 million, or $505 psf of
net lettable area. Indonesia's Lippo Group is linked to the deal. -
by Andrea Tan SINGAPORE
BUSINESS TIMES 9 Sept 2004
Merged banks move out of John Hancock
Tower
Three floors of CBD office block up for sale by Calyon and John Hancock
At least three floors at John Hancock
Tower in Raffles Quay are up for sale as financial institutions merge and
move out. Other floors are also available for lease. French bank Calyon is
selling two floors on the 18th and 19th storey of the freehold building,
while John Hancock is putting up the 20th storey for sale.
Colliers International is marketing the
three floors. The 18th and 19th storeys used to be occupied by Calyon, which
is the merged entity of Credit Agricole and Credit Lyonnais' corporate and
investment banks. US-based John Hancock has just completed its merger with
Canadian insurer Manulife Financial Corp.
The last transaction for John Hancock
Tower was in July 2003 for the 14th floor for $8.6 million or $803.52 per
square foot, according to caveats lodged with SISV Services.
In 2002, the 21st and 22nd floors were
sold for $930 psf. John Hancock used to occupy three floors from the
20th-22nd storey. Tenants are being sought for the two upper floors.
Occupancy at John Hancock Tower is around 80 per cent and current asking
rents are around $3.50-$4 psf.
The building, completed in 1993, is
strata-titled on a per floor basis. There are a total of 114 carpark lots. '
Freehold strata office space is rare and
with office rents firming up, we expect to see keen interest coming from
private investors looking to purchase for rental income and potential
capital appreciation,' said Calvin Yeo, director of commercial sales and
leasing at Colliers International. 'John Hancock Tower is one of the more
prominent office buildings in the Central Business District.'
According to official data, the stock of
vacant office space fell by 31,000 sqm in Q2 - the second consecutive
quarter of decline. Capital values of office space rose 0.3 per cent in Q2
against Q1.
More space could be available either for
sale or lease at John Hancock Tower. The lease for Japan's UFJ Bank, which
occupies four floors, is understood to be coming up for renewal soon. UFJ
and Mitsubishi-Tokyo Financial Group are in discussions over a proposed
'management integration' which would create the world's largest banking
group in terms of assets. The Industrial & Commercial Bank of China
occupies the 12th floor and the banking hall.
John Hancock Tower was originally called
Century Tower 21. During the market peak in 1996, listed Tuan Sing Holdings
paid $1,896 psf for 55,198 sq ft of space in John Hancock Tower while
another party paid $2,199 psf for the 11th floor. -
by Andrea Tan SINGAPORE
BUSINESS TIMES 29 July 2004
First major Raffles Place office sale
this year at 10-yr low
Teos buy floor at John Hancock Tower for $790 psf
The family of late hotelier Teo Lay Swee
bought an office floor at the 25-storey John Hancock Tower recently for only
$790 per square foot - probably the lowest in a decade for an entire floor
of freehold office space in the Raffles Place area, say property consultants
The seller of the 14th floor is
understood to be a unit of listed Tuan Sing, which bought it along with a
several other floors in early 1996 - during the peak of the property market
- for about $104.6 million or $1,895 psf.
The floor is about 10,129 sq ft, and is
leased except for one unit of about 2,700 sq ft.
At the price of about $8 million, its
current net yield works out to about 4.7 per cent factoring in the vacant
unit, BT understands. If the Teos manage to lease the empty office space at,
say, $3.50 psf a month, the net yield should rise to about 5.8 per cent.
Analysts, however, note the risk of this
yield falling when leases expire and are renewed at lower rentals.
Prices in the building seem to have
fallen about 34 per cent over the past two years. In July 2001, Tuan Sing
sold the building's 13th floor to 2G Capital for $12.4 million or $1,223
psf.
In June 2001, a property fund managed by
GRA Singapore - now known as Pricoa Real Estate Investors (Asia) Pte Ltd (PREI
Asia) - bought the 23rd, 24th and 25th floors from Tuan Sing for nearly
$1,200 psf. And last year, India International Insurance group bagged the
21st and 22nd floors for about $930 psf.
Property consultants told Singapore
Business Times that the price drop at John Hancock Tower, next to Hong
Leong Building, is in tandem with the fall in office capital values in
Singapore estimated by valuers amid a glut and weak demand which have seen
office rents sliding.
More importantly, the Teos' $790 psf
acquisition exemplifies this drop, being the first sizeable freehold office
transaction in the Raffles Place area this year.
Jones Lang LaSalle data show that average
gross monthly rents of CBD Core prime Grade B buildings (the firm classifies
John Hancock Tower in this category) have slipped 46 per cent from $6.90 psf
during the most recent peak in Q1 2001 to $3.75 psf in Q3 this year. Capital
values have fallen 42 per cent from $1,185 psf in Q4 2000 to $690 psf in Q3
2003.Mr Teo's family bought the floor in John Hancock Tower through Queens
Hotel International, a unit of their Cockpit International group. The Teos
are also said to be on the lookout for more investment opportunities for
prime freehold commercial and residential properties in Singapore. Outside
Singapore, Cockpit International group owns seven hotels - five in Australia
and two in the United Kingdom - totalling about 1,800 rooms. Most were
bought after the group sold Cockpit Hotel in Singapore in 1996 for $380
million to a Wing Tai-led consortium. The hotel has been pulled down and
taking its place will be the 265-apartment Vision Crest.
Analysts say that although the office
market outlook remains soft and there may be further downside in capital
values, Cockpit's buy at John Hancock Tower should be a good long-term
investment.
As well, it is just across the New
Downtown, which should help cushion further declines in values in John
Hancock Tower. - by
Kalpana Rashiwala Singapore Business Times
2 Oct 2003
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