A 29-YEAR-OLD commercial building on Beach Road is changing hands at $370 million.
The buyer is Allco Commercial Real Estate Investment Trust, which is acquiring the 99-year leasehold KeyPoint from a group of investors led by real estate veteran Han Chee Juan.
Mr Han and his business associates bought KeyPoint, then known as Jalan Sultan Centre, for about $125 million in 1996. The seller then was Pidemco Land, which later merged with DBS Land to become CapitaLand.
KeyPoint had extensive upgrading work done by 2000. Today, it is an integrated 25-storey building with a total net lettable area of 311,892 sq ft. The development comprises a three-storey podium and a 22-storey office tower. It also has a four-storey carpark that can accommodate 227 cars.
Allco says the acquisition is expected to add value to the property trust’s yield and give it exposure to an investment grade quality commercial asset in a fringe region of the central business district.
KeyPoint is 95.9 per cent occupied. While passing gross rents are significantly below the current market rate, many of the tenants’ leases will be up for renewal in the next two years, with over 50 per cent of the net lettable space expiring in the coming year.
This will give the new owner the opportunity to raise rentals going forward.
Source: The Straits Times 6 Oct 07