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Headliners | 22 September 2008
By: David Lee
Articles (57) Profile

CapitaLand Divests Somerset Orchard For $100m

CapitaLand’s wholly-owned unit, the Ascott Group, has entered in a conditional sale-and-purchase agreement to sell Somerset Orchard, an 88-unit serviced residence for $100m, equivalent of about $1,530 psf to OG. The property is on a site with a remaining lease of 74 years. The carrying value of the property is $57m.

CapitaLand is expected to recognise a gross gain of about $43m from divesting the property. After the divestment, Ascott will continue to manage the serviced residence for 15 years, with an option to renew the contract for another 10 years. Somerset Orchard is part of Orchard Point, which also includes a four-storey retail podium owned by department store retailer OG.

Ascott deputy CEO (finance & investing) Chong Kee Hiong said, “In line with Ascott’s strategy to optimise the use of capital, the proceeds from this divestment will be redeployed to other investment opportunities to enhance our global presence.” Since the start of this year, Ascott has made strategic investments in Melbourne, Ahmedabad and London.

Sembcorp Marine Secures New Rig Orders Worth US$425m

Sembcorp Marine’s subsidiary PPL Shipyard has secured a US$425m contract from Egyptian Offshore Drilling Company (EODC) for the construction of two units of jack-up rigs, to be delivered in 2010 and 2011. This latest deal will bring the company’s net order book to $10.2b.

The pair of high performance jack-up rigs will be built based on PPL Shipyard’s proprietary design Pacific Class 375 mobile offshore drilling unit and proprietary components. They will be equipped to drill high pressure and high temperature wells at 30,000 feet while operating in 375 feet of water.

Commenting on the prospect for the deal, Senior General Manager Tan Kim Yung said, “We are pleased that EODC have entrusted PPL Shipyard with the construction of its two offshore drilling units for their joint venture company. We envisage that EODC will increase their fleet in the near future in view of the demand for offshore drilling off Egypt.”

First Reit Signs Options To Acquire $42m Property

First REIT, Singapore’s first healthcare real estate investment trust, has signed a put and call option agreement to purchase a healthcare logistics and distribution centre for $42m. This key acquisition will represent First REIT’s fifth asset in Singapore and it is expected to be completed in July 2009.

This latest acquisition, which is subject to unitholders’ approval, will lift First REIT’s assets under management by 13% to $368m and further diversify its portfolio, raising income contribution from Singapore assets from the current 14% to 21%.

Manager of First REIT, Bowsprit Capital Corp’s CEO Ronnie Tan said, “The centre will cater to multinational companies in the pharmaceutical and nutritional products industries, which are growing markets in Singapore. Given its immense potential, we are confident of the returns it will bring to unitholders via a steady contribution to our cash flow through the triple net lease which has a built in mechanism for annual rental escalations.”

New Toyo International Sets To Buy Up Paper Base Converting

New Toyo International’s wholly-owned unit, New Toyo Lamination has entered into a share sale agreement with Tien Wah Press to buy its entire 51% shareholding in Paper Base Converting (PBC) for RM5.2m. Upon completion of the proposed acquisition, the company which presently has a 49% shareholding, will own 100% of PBC.

The acquisition is part of the strategy to consolidate all the specialty paper companies in the group under the company so as to enjoy the synergies and economies of scale, potential cost savings and the sharing of know-how. The company has been in the specialty paper business for more than 30 years.

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