Melbourne?s CBD:  it?s 3 in a row for Hiap Hoe

The 11,922 square metre complex on a 3144 square metre block has the capacity to earn $8.1 million in annual rent.

Occupied until 1983 by Walton?s Department store, 206 Bourke Street was developed in 1986 by Village Theatres into a five-level cinema complex. Filling the huge basement of that complex was a challenge for the developer who refurbished the space less than ten years ago.

Much of the asset?s value lies in the right to develop airspace ? in the short term via an established rooftop bar, but in the medium or longer term, with at least one apartment complex.

Vendor Les Smith with joint venture partner Macquarie has listed the asset for sale at various stages over the past couple of years, standing firm on their asking price of between $105-$110 million.

The investment is Hiap Hoe?s third major property play in Melbourne in two months.

Last week, Hiap Hoe paid $43.8 million for a car park with a permit for a 627-unit, 46-level apartment tower. Last month it paid MAB Corporation $25 million for a 3795 square metre slice of Docklands with permits for two towers with more than 400 flats.

The 3165sq m site spans an entire city block and holds a 445-space commercial carpark, about 5000sq m of office space and retail outlets on the ground floor. The site has frontages to Lonsdale and Little Lonsdale streets.  Hiap Hoe purchased the property from VIP Glomac, a private company controlled by Malaysia's Kiam Thiam Lim.

Hiap Hoe executive chairman Teo Ho Beng said the group planned to develop the property in the future and in the interim receive an income yield from the property of close to 6 per cent.  " The opportunity to acquire a substantial core Melbourne CBD development site with an approved permit represents a strategic acquisition for our group," Mr Teo said.    " We are delighted to not only have secured the site for future development but also to be able to acquire a holding such as this with an income that represents an income yield close to 6 per cent, well suited to our future plans."

Mr Teo said the group was drawn to the Lonsdale Street site because of its proximity to CFS Retail's $1 billion Emporium development, while the falling Australian dollar made the acquisition more cost-effective for the group.  The expansive retail project is expected to open at the end of March.

Hiap Hoe plans to start work on its development within 12 to 24 months.  The project will include 627 apartments, and 740 commercial and residential carparking spaces. It will retain retail on the ground level, according to executive director Tracy Wun.

Hiap Hoe, which is listed on the Singapore stock exchange, recently acquired a site on Pearl River Road in the Docklands NewQuay district.  It is actively pursuing other acquisitions in Melbourne's CBD.

The deal was negotiated by CBRE agents Mark Wizel and Josh Rutman with Savills agents Clinton Baxter and Nick Peden.  " We can confirm that we are seeing unprecedented demand from Asia-based overseas buyers for Melbourne CBD and immediate CBD fringe development sites as well as traditional investment properties," Mr Wizel said.

Revenue for the three months to June 30 soared by 87 per cent to $80.3 million, partially driven by progressive revenue recognition from Waterscape at Cavenagh and sale of units from Signature at Lewis and Skyline 360.

Revenue received by the group's subsidiary from progress made in the construction of a joint-venture project, Ramada Singapore and Zhongshan Mall, also contributed to total revenue.

Earnings per share climbed to 6.24 cents from 3.54 cents previously while net asset value per share firmed to 72.84 cents compared to 64.94 cents as at Dec 31. 

N.B. NAV =72.84c - did not book revaluation gain of ZSP Hotels in 1H2013. Interim div 1.2c is 140% higher than last yr 0.005c.

 

Meanwhile, Hiap Hoe is offering 28 percent discount for four penthouses at Skyline 360, translating to S$9 million to S$12.3 million (US$7.1 million to US$9.7 million). The freehold condominium project is conveniently located close to Somerset MRT station and the Orchard shopping belt. The units are serviced by private lifts and fitted with high quality materials including marble and timber floors, and full height, sliding window and door panels. The development offer expansive views over Orchard Road and Marina Bay.

25 percent discount is also offered by Hiap Hoe’s Signature at Lewis which comprise two- to four-bedroom penthouses. Prices are estimated at S$1,500 (US$1,184) per square feet, or between S$4.6 million to S$5.2 million (US$3.6 million to US$4.1 million).

Source:  http://www.property-report.com/discounted-penthouses-for-sale-in-singapore-30379