Somerset Holdings And GIC Realty To Acquire $180 Million Residential Property In Beijing
Somerset Holdings and the Government of Singapore Investment Corporation (Realty) Pte Ltd, through their subsidiaries, are acquiring a prime serviced residence development in Beijing. The total project cost on completion is expected to be about S$180 million (US$110 million).
The project comprises two luxury 21-storey residential towers with about 400 units, which will be completed in 2001.
The two residential towers are part of the Onward Science & Trade Center, a business cum residential complex, developed by China Merchants Properties Holdings Co Ltd.
The project is in Beijing's main business hub; at the junction of Chang'an Avenue and Third Ring Road. Other developments within this growing Central Commercial district include the China World Trade Center.
Somerset Holdings plans to market the units as serviced residences under its luxury Somerset Grand brand, targeted at upper middle executives. The residence is scheduled to receive its first guests in 2001.
Somerset Holdings Limited is a member of Pidemco Land, while GIC Realty Pte Ltd is the holding company for real estate investments for the Government of Singapore Investment Corporation.
The purchase is being transacted through Hemliner Pte Ltd, a 30 per cent owned associate of Somerset Holdings. GIC Realty, through its subsidiary, owns the remaining 70 per cent of Hemliner Pte Ltd.
Somerset Holdings' chief executive officer, Mr Kee Teck Koon, said that the purchase is part of Somerset Holdings' strategy to have strong presence in key gateway cities.
He added: "The joint venture with GIC Realty is in line with Somerset Holdings' plans to form alliances and partnerships with international financial investors either as co-investors or to provide third party management, to exploit opportunities in the region's hospitality and retail sectors.
"We are entering the market at the bottom of the property cycle and this investment should see upside capital appreciation in the medium term. With Somerset Grand, we are confident of creating a new niche in the fully serviced, luxury residences segment of the accommodation market in Beijing," said Mr Kee.
"With the regional recovery, we see opportunities for attractive investments in serviced residences in China, Taiwan and Hong Kong. Our alliance with GIC Realty enables us to better exploit these opportunities, and increase our competitive lead as the undisputed market leader in serviced residences in the region," he added.
"Somerset Holdings will add value to these investments through our management capabilities from operating in 21 cities, and by leveraging our extensive regional network of serviced residences."
Mr Kee said that Hemliner, which is registered in Singapore, will become Somerset Holdings and GIC Realty's joint venture vehicle to pursue investments in the serviced residences business in China, Taiwan and Hong Kong.
The two residential towers to be acquired have a total gross floor area of about 60,000 square metres. The purchase is subject to due diligence and a building audit.
The entire Onward Science and Trade Center development comprises four office buildings, two luxury apartment towers, a retail podium and a basement carpark. Built on a 42,000 square metre site, it has a gross floor area of 321,000 square metres.
The project is ideally located, close to many five-star hotels, shopping malls, embassies and offices. Tian'anmen Square and Beijing Railway Station are a 10-minute drive away, while the Fuxingmen- Bawangfen Metro Line is next to the complex.
One 18-storey office tower has been purchased by Hewlett Packard and Hoechest of Germany, while another similar tower is owned by Motorola. The largest 32-storey office tower has 10 floors owned by Samsung of South Korea. Tenants in the building include the Standard Chartered Bank and the Beijing Arbitration Committee.
The retail podium houses a three-storey entertainment and leisure plaza with restaurants and retail outlets.
Somerset Holdings is a leading owner and manager of serviced residences and retail properties in the Asia Pacific region.
The company is the hospitality and retail subsidiary of Pidemco Land, and is publicly listed in Singapore. Somerset Holdings owns or manages 2,800 serviced residence units and about 300,000 square metres of retail space in the Asia Pacific.
Ida Lim, Vice President
Investor Relations & Corporate Communications
Hp: 9-628-8339 Tel: 65867-230 Fax: 62272-220
Tay Cheng Cheng, Assistant Manager
Tel: 65867-231 Pgr: 9-266-0127 Fax: 62272-220
Issued by: Somerset Holdings Limited