Amcorp Properties Bhd (Amprop) is acquiring an effective stake of 20 percent in two premium Grade A office towers in Tampines Grande, Singapore. Amprop’s acquisition of the two premium Grade A office towers in Tampines Grande involves a funding commitment of S$24 million (RM73.2 million).
Amprop’s unit is forming a joint-venture (JV) company with SRIF Pte Ltd and an endowment fund deemed to be established under Nanyang Technological University in a strategic move to expand its footprint into Singapore.
In its filing with Bursa Malaysia, Amprop said its wholly owned subsidiary – Amprop Synergy – had entered into a JV agreement in respect of a JV company known as SRIF Amcorp Pte Ltd to acquire an interest in the two premium Grade A office towers in Tampines Grande.
Upon execution of the JV agreement, Amprop Synergy will subscribe to a 40% equity interest in SRIF Amcorp, while SRIF Amcorp will subscribe to a 35% equity interest and the endowment fund will subscribe to the remainder 25% equity interest in the JV company.
SRIF Amcorp owns 50% in Ascend TGrande Pte Ltd (AscendTG), a JV company jointly-owned with Metrobilt Construction Pte Ltd.
“A JV agreement was also entered between SRIF Amcorp and Metrobilt to regulate the terms and conditions of their JV in AscendTG, for the purpose of acquiring the entire equity interest in T-Grande Investment Holding Pte Ltd, which holds the entire equity interest in T-Grande Property Holding Pte Ltd,” it said.
T-Grande Property owns the two premium Grade A office towers in Tampines Grande.
Amprop said the property is a leasehold building, comprising two blocks of eight-storey premium Grade A office towers linked by a double-volume entrance lobby with retail and F&B outlets on the ground floor and a basement carpark. It has 287,651 sq ft of lettable space, with an occupancy rate of 91% as at Feb 28, 2019.
The the two premium Grade A office towers in Tampines Grande had a tenure of 99 years leasehold from Aug 20, 2007, with a net book value of S$366mil (RM1.12bil) as at Dec 31, 2018.
The Property is situated in Tampines Regional Centre (“TRC”), the first and most established regional centre in Singapore. Just 25 minutes away from the Central Business District (“CBD”) and a 10-minute drive from Changi Airport, it is also well connected by both private and public transport, and easily accessible via major expressways. The Tampines MRT Interchange Station that is part of both East-West line and Downtown line is within 5 minutes’ walk, with one of the station’s exits directly opposite the Property.
“The JV is part of a strategic move by Amprop to expand its footprint into Singapore,” Amcorp said.
“The JV provides Amprop Group with an opportunity to build its presence and investments in Singapore’s limited Grade A decentralised office market, particularly on the eastern side,” it noted.
The JV is in line with Amprop’s investment strategy to focus on properties in key developed global cities and partnerships with reputable property developers for its overseas projects, it added.
According to Amprop, the JV is not expected to have a material effect on the earnings of Amprop Group in the current financial year ending March 31, 2020, but is expected to contribute positively in the following years.
The biggest gainers following the new property cooling measures is likely be owners of strata portfolio of offices and shophouses approved for commercial use. The property cooling measures affected almost all categories of buyers and is predicted to achieve its intended objectives of cooling demand and moderating price growth.
One report said investors looking for alternatives to park their money in the wake of property cooling measures, would divert their attention to the offices and shophouses markets as they are not subjected to this round of purchase or sales restrictions/encumbrances.
Mr Paul Ho, chief mortgage officer at iCompareLoan, said that despite the property curbs introduced by the Government last year, Singapore is still an attractive residential market for investors.
Although the property market exuberance has been curbed to some extent with the property cooling measures introduced last year, Singapore as a property market investment destination still remains among the top – shoulder to shoulder – with other cities in the world like London, New York, Shanghai and Sydney.
“We have to be mindful that there is a lot of excess capital fluidity here and at 1.9 – 2 percent, Singapore has one of the lowest interest rates for home loans in the region,” Mr Ho added.
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