Singapore Companies
Published October 11, 2006

Lippo reaps double what it paid for flagship

Group paid $151m 2 years ago for 78 Shenton Way, sells it now for $290m


THE Riady family's Lippo Group is selling its flagship Singapore office building at 78 Shenton Way for about $290 million, or almost double the $151 million it paid for the building slightly over two years ago, sources say.

The buyer is a property fund, said to be linked to Australia's Macquarie Bank.

Lippo renamed the building Lippo Centre, after it bought a substantial interest in the property in August 2004. But market watchers expect the group to move its Singapore headquarters soon to OUB Centre, which boasts the more prestigious address of 1 Raffles Place.

Earlier this year, a Lippo-Ananda Krishnan consortium took control of Overseas Union Enterprise and other entities, giving it a majority stake in OUB Centre.

Having an office at this location will place the Ria dys and Lippo closer to other big corporate tycoons in Singapore - like Wee Cho Yaw at UOB Plaza and Kwek Leng Beng at Republic Plaza.

The current Lippo Centre at 78 Shenton Way which has just been sold is on a site with a remaining lease of about 76 years and which has about 298,000 sq ft of net lettable space. Lippo's purchase price of $151 million in August 2004 reflected about $505 psf of net lettable area.

Lippo is proving to be a savvy investor in the Singapore property market. In March this year, Lippo's Singapore-listed unit Auric Pacific bought One Phillip Street, a 16-storey office block, from Kewalram group for $37.6 million - or about half the $76.8 million price at which Lippo sold the property to Kewalram in early 1996 near the market peak.