M&G Real Estate unveils revamped Compass One
By Michael Lim
/ The Edge Property |
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Compass One mall, formerly known as Compass Point, officially opened its doors on Sept 27 after an 11-month revamp and upgrading programme estimated to have cost more than $60 million. Not only has the suburban mall opened with a new look, but it also has a new owner — M&G Real Estate Asia Property Fund. Previously, the property was managed by Frasers Centrepoint, which divested its remaining 18.99% stake in the mall in December 2015 for $80.3 million. The mall is now being managed by CBRE.
Compass One officially opened its doors on Sept 27 after an 11-month revamp and upgrading programme estimated to have cost more than $60 million
M&G Real Estate officially took over full ownership of Compass One in February this year. The attraction of Compass One is that it is located in the heart of Sengkang Central in the northeast region and was one of the first integrated developments in Singapore when it was completed in 2002. The project includes the 530-unit Compass Heights private condominium, which sits on top of the mall and is linked directly to a bus and MRT/LRT interchange.
The substantial investment in the upgrade of Compass One demonstrates M&G Real Estate’s “long-term confidence in the property and its location”, says Ng Chiang Ling, the firm’s CEO and chief investment officer for Asia-Pacific.
M&G Real Estate increased the net lettable area of the mall to 272,881 sq ft with 208 shops, from 126 shops with an NLA of 269,546 sq ft. One of the biggest transformations was the carving up of 48,460 sq ft of space in the first two levels of the mall that was previously occupied by Metro Department Store, which moved out in August last year before the mall closed for the revamp. In its place now are 38 new shops, including Miniso, Bossini and Yakun Family Café.
Ng says the substantial investment in the upgrade of Compass One demonstrates M&G Real Estate’s ‘longterm confidence in the property and its location
A new atrium was created on the second level, thereby converting the previous atrium on the first level into retail space for more shops and pop-up stores. There are 50 new retailers in the mall, including IT store Challenger, optical shop Owndays and educational centres such as Mavis Tutorial Centre and Stalford Learning Centre.
Original tenants, such as Cold Storage, Kiddy Palace and Royal Sporting House, have also returned. Although 95% of the mall’s retail space was pre-committed before the mall opened its doors on Sept 1, only 80% of the retail shops were opened, with the rest scheduled to open in stages. The tenant mix has also been tweaked, with F&B now increased to 33% from 20% previously. New eateries include Royal London Duck and Paradise Hotpot.
The rooftop has been turned into a wetand- dry children’s playground, and the air-conditioning system overhauled with new chillers, says Ng.
There are 50 new retailers in the mall, including IT store Challenger, optical shop Owndays and educational centres such as Mavis Tutorial Centre and Stalford Learning Centre
The mall’s net lettable area was increased to 272,881 sq ft with 208 shops, from 126 shops with an NLA of 269,546 sq ft
Logistics
Besides Compass One, M&G Real Estate also owns a logistics asset, Global Trade Logistics Centre (previously known as CWT Logistics Hub II), under its Asia Property Fund. Located in Tanjong Penjuru, it was acquired from CWT for $115.2 million in 2008. The building has an NLA of 530,590 sq ft.
M&G Real Estate’s Asia Property Fund is open-ended and taps institutional capital. Set up in 2006 with LaSalle Investment Management, it owns assets previously held by Prudential’s UK life funds. In 2013, M&G Real Estate took over full management of the fund.
While M&G Real Estate would like to increase its exposure in the industrial, logistics and office sectors in Singapore, “competition for assets has been stiff”, concedes Ng. She attributes this to the fact that Singapore has also been attracting the interest of sovereign wealth funds from other countries although there is limited supply of investment grade assets on the market. Many of the quality industrial, logistics, retail and office assets are tightly held by developers, real estate investment trusts and other funds, she adds.
Regional expansion
M&G Real Estate is one of the top 25 real estate fund managers in the world by assets under management, with about US$33 billion ($45 billion) invested in properties in Europe, North America and the Asia-Pacific as at June 30.
In Asia-Pacific, it has invested US$2.5 billion in 20 properties across Singapore, Hong Kong, South Korea, Japan and Australia. According to Ng, the company is still exploring opportunities in these five key markets, and Japan is the only country where it will focus on both residential and commercial assets. This is because there are opportunities to buy entire residential blocks for sale there, and they can be leased for long-term investment income. Residential assets in Japan offer more attractive yields than commercial assets, she adds. They also present a redevelopment opportunity in the future.
M&G Real Estate acquired two assets in Japan recently for US$123.6 million. The first is a mixed portfolio of 10 residential assets with a total of 490 homes in Chiba, Tokyo and Osaka. The second asset is a fully leased recreation complex in Fukuoka completed two years ago. The property is located next to the Nakasu Kawabata station and is a 10-minute walk from the Tenjin station. It has a convenience store, fitness centres and restaurants. “Japan is an attractive investment market as it has very low cost of debt and produces relatively stable income for investors,” Ng says.
Meanwhile, M&G Real Estate is looking for investment opportunities in the office, industrial and logistics sectors in Australia, Hong Kong and South Korea.
This article appeared in The Edge Property Pullout, Issue 748 (Oct 3, 2016) of The Edge Singapore.
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