The Australian Financial Review (AFR) says the Abu Dhabi Investment Authority (ADIA), which owns 70% of Paya Lebar Quarter (PLQ), would like to divest its stake.
According to the AFR, and quoting Lendlease Group’s CEO Tony Lombardo, Lendlease is working with ADIA to divest PLQ Mall.
PLQ Mall comprises 340,000 sq ft of retail space, according to its website. The mall was opened in 2019, suggesting that it is likely to be approaching its second lease cycle. The retail leasing cycle is around two to three years.
According to the AFR, ADIA would like to sell its entire 70% of PLQ, which comprises three office towers and PLQ Mall.
Lendlease Group owns the remaining 30% of PLQ. The AFR, quoting Lombardo, has suggested ADIA wait till the office market has recovered.
Interestingly, rents and capital values of the Singapore office market — in particular Grade A office buildings in the CBD — have stayed resilient compared to other gateway cities such as Hong Kong, London and New York.
Market-watchers point to Bedok Mall’s capitalisation rate of 4.6%, and its capital value of more than $3,500 psf as a guide to PLQ Mall’s valuation. This would place PLQ Mall’s valuation above $1 billion.
Separately, according to Bloomberg, Lendlease Group has issued $400 million perpetual securities in Singapore dollars, priced at around 3.95%.
Lendlease Group, which is listed on the Australian Stock Exchange (ASX), is sponsor and the largest unitholder of Singapore-listed Lendlease Global Commercial REIT.
