-- DBS will buy 30% of new tower its headquarters are located in
from Li Ka-shing-owned groups
-- Southeast Asia's largest bank looks to increase exposure to
Singapore's new financial district
By Sam Holmes and Martin Vaughan
(Adds comments from DBS, tenants in Marina Bay financial
district, property rental rates.)
SINGAPORE-DBS Group Holdings Ltd. (D05.SG), Southeast Asia's
largest bank by assets, said Monday it will pay groups owned by
Hong Kong billionaire Li Ka-shing US$848 million for a stake in an
office tower at the Marina Bay Financial Center, where the bank's
headquarters are located.
The zone, often compared to London's Canary Wharf or Shanghai's
Pudong, has attracted a large number of multinational corporations
looking to modernize their Singapore presence since the opening of
the US$5.5 billion Marina Bay Sands casino resort in the district's
eastern side in 2010.
The Singaporean bank is acquiring the stake in Central Boulevard
Development Pte. Ltd., the holding company of the Marina Bay
Financial Center Tower 3, from a joint venture of Mr. Li's
Hutchison Whampoa Ltd. (0013.HK) and Cheung Kong (Holdings) Ltd.
(0001.HK).
DBS this year completed its relocation to and acquired naming
rights for the 40-storey office block at Marina Bay, which opened
in 2011. It was previously headquartered in two office towers in
Shenton Way, south of Marina Bay.
"The decision to acquire a stake in our new headquarters in MBFC
Tower 3 enables us to better manage our occupancy costs in the
long-term," DBS Chief Executive Piyush Gupta said in a
statement.
"The Marina Bay area is a location of choice for top financial
institutions and businesses and the desirability and value of being
housed here is only going to grow as Singapore strengthens its
position as a leading Asian financial hub."
The acquisition also includes an option to buy an additional
3.3% stake in the tower for S$115 million.
The district sits across 360 hectares (889 acres) of downtown
land that has been reclaimed by the Singapore government over the
past three decades as part of its effort to add space for critical
economic development on the land-scarce island.
Other companies that have also relocated to the district in the
past two years include U.K. bank Standard Chartered PLC (STAN.LN),
Citigroup Inc. (C) and Google Inc. (GOOG).
According to Knight Frank, a property consultancy, the area
commanded an effective monthly rental rate of S$10.60 to S$11.90
per square foot for office space in the third quarter, compared
with S$9.40 to S$10.30 in nearby Raffles Place, the city's historic
financial center, and S$9.00 to S$10.20 in Orchard Road, the main
retail precinct.
Singapore's government, which has already invested S$9 billion
in infrastructure in the area, has committed to invest another
S$3.3 billion over the next 10 to 15 years.
Write to Sam Holmes at samuel.holmes@dowjones.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
