BUY S$1.90 STI : 3,215.27
Price Target : 12-Month S$ 2.05
Temasek and Singtel take up space at The Atrium@Orchard and JCube respectively
CMT announced that Temasek Holdings, an existing tenant at The Atrium@Orchard, will be taking up additional office space in the same building, while Telecom Equipment (Singtel) will be taking a 3-year lease at JCube.
Temasek Holdings taking up space at The Atrium@Orchard
Temasek Holdings currently has an existing lease at The Atrium@Orchard due to expire on 30 April 2012. With the additional space taken up, the group including its whollyowned subsidiary Fullerton Fund Management, will be the anchor tenant and will be occupying the majority of the office space at The Atrium@Orchard. To recap, total office NLA at The Atrium is around 230,000 sf. The 10-year lease will start from April 2012 to March 2022 and total aggregate consideration is $221.8m. CMT has commissioned CBRE to provide an independent opinion on the office lease terms and the consultancy group mentioned that the rental rates are comparable with prevailing market rates and leases of similar office premises.
Telecom Equipment (Singtel) Lease at JCube
CMT also announced that they entered into a retail shop lease with Telecom Equipment (Singtel) for a consideration of S$1.4 m. The Retail Shop Lease is for a term of three years and will commence on or around the date on which JCube obtains its TOP.
We continue to like CMT for its proactive leasing strategy. Upon the pre-commitment of Temasek Holdings, the office space at The Atrium@Orchard would be well committed ahead of its completion at end-2012. We understand that the group has started the marketing for the retail space and we should get an update progressively. Meanwhile, leasing demand at JCube remains healthy with the mall achieving more than 80% pre-commitment. The mall is expected to complete by end-2011. Maintain BUY with TP S$2.05.
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