by Ganesh Sahathevan
The current interest in the business affairs of Ong Beng Seng and Minister S. Iswaran brings to mind a peculiar Ong Beng Seng deal of the late 90s.
As a result of the Crash of 1997 Ong undertook a sale of his assets worldwide to reduce debt. That included his Caltex-Hitachi Towers but no one was interested in what he was demanding for the buildings.
Finally, and after much speculation Temasek ownerd Pidemco Land stepped in in late 1999 to acquire most of the interests in those assets late for what was estimated to be a sum of S$670 Million.
Pidemco was meant to go it alone with this deal, but by early 2000 Pidemco announced that it has sold 50 per cent of the 3 Hitachi Tower to National University of Singapore (NUS).
Pidemcon also announced that it had brought in , NTUC Income, NUS and IP Property Fund to provide funding for the purchases of Caltex House and Hitachi Tower.
By November 2000 Pidemco had merged with DBS Land to become CapitaLand.
It would seem that NUS got itself involved in bailing out Ong Beng Seng, or at least in Pidemco's Ong Beng Seng bail-out.
END
References
Contrary to earlier speculation, Pidemco did not bring a partner to the deal. Instead, it will fully own Hitachi Tower and 80 per cent of Caltex House, with Citibank holding the remaining 20 per cent. Hitachi Tower, Caltex House sold for estimated S$670m.
By Carol Eng.
450 words
5 November 1999
Business Times Singapore
STBT
English
(c) 1999 Singapore Press Holdings Limited
[SINGAPORE] Pidemco Land yesterday confirmed that it has bought the Hitachi Tower and Caltex House office blocks at Raffles Place, tying up one of the biggest commercial property transactions in Singapore estimated by a source at nearly S$670 million.
A Pidemco spokesperson said a sale and purchase agreement was signed recently with the vendors - businessman Ong Beng Seng's privately-held Reef Holdings and Japan's Kowa Real Estate - to buy the companies which own the two buildings.
Contrary to earlier speculation, Pidemco did not bring a partner to the deal. Instead, it will fully own Hitachi Tower and 80 per cent of Caltex House, with Citibank holding the remaining 20 per cent.
Pidemco is believed to have bought the 999-year leasehold Hitachi Tower at about S$1,400 per square foot of net lettable area, said sources.
Caltex House, which has a 99-year tenure, is understood to have cost just under S$1,250 psf of net lettable area.
This brings the deal's total value to just under S$670 million.
There have been no major sale of office buildings in recent times, and the S$682 million purchase of Paragon mall by a Singapore Press Holdings-led consortium at end-1996 is still believed to be the biggest commercial deal so far.
The Pidemco spokesperson said Hitachi Tower and Caltex House are each more than 90 per cent leased currently, and that the purchases are in line with its strategy to build up its commercial portfolio.
The 37-storey Hitachi Tower comes with a four-storey retail podium and has a lettable area of 288,600 sq ft. The 33-storey Caltex House, which also has a four-storey retail podium, has a net area of 266,500 sq ft. Both buildings were completed between 1992 and 1993.
The Pidemco spokesperson also said the current timing was good as an upturn in the office market is expected. "The two acquisitions will also complement our current portfolio in the financial district," she added.
On whether more acquisitions were in the offing, she said: "We are always open to acquiring more office buildings, especially those in very prime locations, not necessarily just those in the financial district."
Pidemco's current portfolio includes Pidemco Centre, Temasek Tower, Capital Tower, Springleaf Tower and two carpark buildings at Market Street and Golden Shoe. The spokesperson also said Pidemco Centre has a committed occupancy of 92 per cent while Temasek Tower's committed occupancy is 96 per cent. Both Hitachi Tower and Caltex House will be held for rental income, she said.
(c) 1999 Singapore Press Holdings Limited.
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Bu then by 2000:
NUS joins Pidemco in Hitachi Tower purchase.
By Carol Eng.
560 words
16 March 2000
Business Times Singapore
STBT
English
(c) 2000 Singapore Press Holdings Limited
PIDEMCO Land has roped in three partners - National University of Singapore (NUS), NTUC Income and IP Property Fund - for its purchases last November of Caltex House and Hitachi Tower.
All the transactions were made at the same prices that Pidemco paid for the buildings, a Pidemco spokeswoman told BT. The prices were not disclosed then or were they disclosed yesterday, but sources had said earlier that Pidemco bought Hitachi Tower for about S$1,400 per sq ft of net lettable area, and Caltex House for about S$1,250 psf, which worked out to a combined worth of about S$660 million, excluding a 20 per cent stake in Caltex House still held by Citibank.
In a statement yesterday, Pidemco said it has sold 50 per cent of the 37-storey Hitachi Tower office building to NUS.
It also announced that Citibank has finally sold its 20 per cent stake in the 33-storey Caltex House to IP, which bought another 5 per cent interest from Pidemco, giving it a 25 per cent share in Caltex House. NTUC Income also bought 25 per cent of the building from Pidemco.
Pidemco is left with a half-share in each of the two Raffles Place buildings, which it had acquired from businessman Ong Beng Seng and Japan's Kowa Real Estate.
Based on the estimated psf prices, NUS' Hitachi Tower stake is valued at about S$200 million. Assuming that Citibank's Caltex House divestment to IP was made at the same price, the 25 per cent stakes of IP and NTUC Income in the building are worth around S$83 million each.
NUS' S$200 million baby is its first investment in a commercial building. According to its latest annual report, the educational institute already had S$15.9 million worth of "investment properties" as at March 1999.
Said NUS deputy vice-chancellor C C Hang in the statement yesterday: "Hitachi Tower is an attractive investment which would provide returns to help the university fund new initiatives." When contacted, NUS said it is "constantly upgrading its teaching and research capability and this will require substantial funding, in addition to resources being made available by the government".
It said the investment was funded from the university's general endowment fund set up from public donations. Besides this and government grants, NUS is also funded by tuition fees and investment income. "The bulk of the university's funds are invested in financial instruments such as bonds, equities and fixed deposits," said NUS in a faxed reply to BT queries. "NUS has no immediate plans to invest in other properties."
The Pidemco spokeswoman said yesterday that Hitachi Tower and Caltex House each have a net yield of 5 per cent.
The Caltex House investment is the first transaction of IP, a joint venture between Pidemco and ING Real Estate (part of Dutch financial services group ING).
NTUC Income yesterday made clear that it has "room" to increase its property investments and is "always on the lookout" for attractive buys.
Hitachi Tower has a 999-year tenure and 286,083 sq ft of net lettable space. Caltex House has a 99-year lease which began in December 1989, and it has 266,299 sq ft of net area.
(c) 2000 Singapore Press Holdings Limited.
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