Li Ka-shing's Singapore property joint development looks to expand
Billionaire's joint venture may seek more landin the central Marina Bay business district
Billionaire Li Ka-shing's Singapore property joint venture may seek more land in the city state's downtown to replicate its latest development that attracted global banks including Standard Chartered and Macquarie Group.
The venture, made up of Li's Cheung Kong (Holdings), Hongkong Land Holdings and Keppel Land, developed the Marina Bay Financial Centre for about S$4.5 billion (HK$27.84 billion), it said. The shareholders may be interested in projects close to the existing development, said Warren Bishop, chief executive of Raffles Quay Asset Management, which is owned by and manages the venture's Singapore properties.
"Given the right space, the developers will probably be keen to bid on some of those spaces," Bishop said in an interview yesterday at its Marina Bay Financial Centre in Singapore. "The current perspective of the developers is to be central business district-based, if possible grow on this development here, so adjacent sites within this vicinity would be the most attractive."
The development is part of Singapore's effort to build a new downtown extension to boost its offering of office space and draw the world's biggest financial services companies. The property also has attracted tenants including Barclays and Nomura Holdings as more global banks have relocated regional and global functions to Singapore.
Singapore's move to open up its financial sector after the 1997 Asian financial crisis helped boost demand for office space, especially in the business district, CBRE Group said. The area known as Marina Bay is a 360-hectare development area created from reclaiming land off the sea fronting the banking district, and now includes Las Vegas Sands' Marina Bay Sands casino-resort with a convention centre that is able to accommodate 45,000 delegates. Land reclamation played a prominent role in the growth of Singapore's central business district, according to CBRE.
Monthly prime office rents averaged S$10.60 a square foot over the past five years, according to the property consulting company, lower than the peak of S$18.80 in mid-2008.
European companies account for 51 per cent of the space occupied in the Marina Bay area, followed by 22 per cent from Asia and 20 per cent from North America, according to CBRE's data.
Rents in Marina Bay have declined about 10 per cent to S$10 a square foot from a year earlier, Moray Armstrong, executive director of office services at CBRE in Singapore, said. The European debt crisis may affect the office market over the next six to nine months, he said.