Come 2014, there will be a new Grade A office tower in Market Street, and it will be standing in place of Singapore’s oldest multi-storey car park.
(More Grade-A real estate is set to replace Singapore's oldest carpark. Image courtesy of Singapore Tourism Board.)
CapitaCommercial Trust (CCT) intends to partner CapitaLand in this $1.4bil redevelopment project, with an expected cost of $1,900 per sq ft of net lettable area. With a gross floor area of 887,000 sq ft and floor plates up to 25,000 sq ft, the completed building is touted to significantly change the central business district’s skyline.
According to the CCT, plans for redevelopment have actually been around for at least 15 years. However, a series of slowdowns and setbacks, such as being unable to attain authorities’ go-ahead until 2008, as well as the 2009 financial crisis, deferred its plans to just recently.
And it may just be perfect timing for the trust. On Tuesday, CCT had announced a dip of 4.1% to $52.1 million in its distributable income for the first quarter, which was mainly due to a decrease in its rental income. (CCT had faced the sale of the StarHub Centre and Robinson Point, as well as a miniscule revenue contribution from enhancement-work-in-progress Six Battery Road.) Its net property income sunk 10% to $70 million while its gross revenue dropped 11% to $91 million.
Speaking to The Straits Times, chief executive of CCT’s manager, Ms. Lynette Leong reveals, “Having considered the unexpired land lease, estimated project cost, potential office market rent and there being no other new Grade A office building completing in 2014 in the core CBD area, we believe that a Grade A office tower is the best use for the site.”
The project’s yield is expected to exceed 6% a year. It will be funded through debts and CCT’s internal cash resources. (Property fund guidelines mandate that trusts may only develop projects that do not exceed 10% of their total assets.) As such, CCT’s limit for development is $601 million.
The Market Street carpark was built in 1964.
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Related Categories: Non-Residential
Tags: CapitaLand, Central Business District, commercial property, commercial property singapore, Grade A office tower, Market Street, office rent, office rental, office space, redevelopment projects in Singapore, Singapore’s oldest multi-storey carpark
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