From the investment perspective, Singapore’s office property sector registered one of the world’s highest year-on-year increases in investments. Singapore’s S$4.8 billion in office investment sales in 2006 was about 150% more than the S$1.9 billion in 2005. The largest commercial transaction for the year was the acquisition of Raffles City. CapitaCommercial Trust (CCT) and CapitaMall Trust (CMT) jointly acquired the property for a total purchase consideration of
S$2.166 billion, making it the largest investment deal in Singapore and the second largest in Asia in 2006. Given these activities, Singapore was billed as one of the top 10 most active office property markets in the world in 2006.

In 2006, CCID continued with the redevelopment of Selegie Complex. Renamed Wilkie Edge, it is an integrated development comprising retail space, offices, SOHO and serviced apartments. Situated near the arts, culture, learning and entertainment hub, Wilkie Edge will appeal to the young and trendy, the creative community, residents and working professionals. Retail leasing has commenced and construction is expected to be completed in mid-2008.

Both CCT’s Market Street Car Park and Golden Shoe Car Park have undergone refurbishment works in 2006 to transform them into modern destination hubs with retail, food and beverage outlets, convenience stores and parking facilities. Raffles City is also undergoing a repositioning exercise. Asset enhancement initiatives and plans are being evaluated to enlarge the retail offering to maximise the value of the property.

China
In 2006, CCID continued to position itself for growth opportunities in the region. China’s various measures to cool the market will be felt in 2007, but nonetheless, the commercial property sector will be positive as it will be underpinned by sustained demand for good quality office space. In 2007, with new and existing financial institutions looking to expand their presence after China’s banking sector deregulation at end-2006, CCID expects office vacancy to decrease and the office rental market to continue to improve.

Capital Tower Beijing, completed in June 2006, is a prime office development located in Beijing’s CBD. This Grade A office building has a gross floor area of about 107,000 sq m. Its top five international tenants are Computer Associates, Black and Veatch, Kraft, Accenture and Hachette Advertising. In 2006, CCID acquired Red Diamond Plaza, which is located in Beijing’s Zhongguancun Software Park. The Grade A office building is currently fully leased to IBM China.

The landmark Raffles City Shanghai will soon be augmented by another Raffles City in Beijing. Located at the southwest corner of Dongzhimen, Raffles City Beijing is close to the Second Embassy district and is also near offices, retail malls, hotels and cultural centres. It will comprise a mix of high-quality, high-rise apartments and Grade A office and retail spaces. Raffles City Beijing is targeted for completion by 2008.

Also slated for development is Raffles City Chengdu, which is located in the heart of Chengdu’s bustling city centre. This iconic commercial development will comprise Grade A offices, a retail mall and a five-star hotel or serviced residences when completed by 2010. Looking ahead, the Group expects to expand the Raffles City brand of prime integrated development properties to more key gateway cities in China.

In Hong Kong, rents for quality space in Central continue to increase due to tightening supply. Vacancy rates in Central fell to 2.2% in 2006, down from 2005’s 5.7%. AIG Tower, located in the prime business district of Central, was fully occupied within a year from the receipt of its occupation permit in April 2005.