DBS Group Holdings Ltd. (DBS) agreed to
buy a 30 percent stake in Singapore’s Marina Bay Financial Centre
Tower 3, where the move of its headquarters was completed in
October, for S$1.04 billion ($850 million) in cash.
DBS, Southeast Asia’s biggest lender, will buy the stake from a
joint venture of Hutchison Whampoa Ltd. and
Cheung Kong Holdings Ltd., it said in a
statement today. The two companies are both controlled by Li
Ka-shing, Asia’s richest man.
Expansion by banks, including Standard Chartered Plc and
Barclays Plc, are driving office demand in Singapore as the
city-state emerges as Asia’s center of wealth management.
Singapore’s office rent may see “meaningful recovery” in the second
half of 2014 after a decline this year, according to broker
property Cushman & Wakefield Inc.
The transaction “could serve as a leading example showing
investors are positive on the commercial property sector,” Ronald
Wan, a Hong Kong-based managing director at China Merchants
Securities Co., said by telephone today. “Investors will generally
buy a commercial property when the price is very attractive or when
they think it will be a good investment. For DBS, I think it’s the
latter one.”
Winnie Cheong, a spokeswoman for Cheung Kong in Hong Kong, and
Hans Leung, a spokesman for Hutchison Whampoa, didn’t immediately
return calls from Bloomberg News seeking comments on the
transaction. Li is 12th on the Bloomberg Billionaires Index with a
net worth of $27.9 billion.
Singapore is building a new financial district on reclaimed land
in the Marina Bay area, adjacent to the Marina Bay Sands hotel,
casino, shopping and conference development. DBS is a so- called
anchor tenant in the building that was completed this year, with
4,800 of its employees occupying 600,000 square feet on 18 of the
tower’s 46 floors. Other tenants include legal firms
WongPartnership LLP and Clifford Chance LLP.
“This transaction represents a unique opportunity for DBS to
acquire a sizeable stake in its global headquarters and better
manage its occupancy costs in the long term,” DBS said in the
statement. “It also demonstrates DBS’ firm commitment to its home
base as it further entrenches its leadership position in Singapore
and the region.”
The Cheung Kong-Hutchison Whampoa venture currently owns
one-third of the tower, which is part of the Marina Bay Financial
Centre development, according to the statement. DBS has the right
to buy the remaining 3.3 percent owned by the venture for S$115
million.
The remaining two-thirds of Marina Bay Financial Centre Tower 3
are equally owned by a subsidiary of Hongkong Land International
Holdings Ltd. and a subsidiary of Keppel Land Properties Pte,
according to the statement.
-- ST
