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Short-term office sites put up for sale to ease crunch

Plots in Aljunied and Mountbatten roads come with 15-year leases

GOOD news for office tenants struggling to find affordable office space in the Central Business District (CBD).

The Government yesterday launched for sale two short-term office sites along Aljunied and Mountbatten roads to ease the office space crunch.

Both plots come with 15-year leases and can house developments of up to three storeys.

The first plot – a 2.12ha site along Mountbatten Road next to the Singapore Association for the Deaf – can take up to 215,278 sq ft of office space.

The other – a 1.89ha site along Aljunied Road just behind the Aljunied MRT station – can house up to 203,276 sq ft of office space.

Consultants expect both sites to draw a good response.

Savills Singapore’s director of marketing and business development, Mr Ku Swee Yong, said the sites would appeal to firms keen to move back-room operations to cheaper spots outside the CBD.

Prime office rents have grown faster in Singapore than anywhere else in the world over the past year, according to a recent report by CB Richard Ellis.

Monthly prime office rental and associated costs shot up 82.6 per cent to $12.60 per sq ft in the 12 months ended Sept 30, it said.

Reacting to the crunch, the Government earlier released two short-term sites along Scotts Road and in Tampines. The first tender was hotly contested, but the other drew just one bid.

Mr Ku blamed the cool response to the Tampines plot on its distance from the CBD.

The two latest sites should get at least five bids each, he predicted.

The tender for the Mountbatten site will close on Jan 9; the Aljunied site, on Jan 16.

Mr Ku estimated the Mountbatten plot could fetch $28 million to $33 million, while the Aljunied site could net $25 million to $28 million.

Mr Nicholas Mak, the head of research and consultancy at Knight Frank, put his estimates at $27 million to $28 million for the Mountbatten plot and $30.5 million to $32.5 million for the Aljunied site.

Meanwhile, mixed development The Riverwalk in the CBD area has been put up for collective sale by tender.

The 0.76ha site, which houses 181 commercial units and 118 apartments, can be redeveloped into a commercial building with a gross floor area of about 403,351 sq ft, said its marketing agent, Jones Lang LaSalle.

This is subject to the authorities’ approval and payment of a development charge – estimated at $3 million – as well as a premium to top up its lease from the existing 72 years to 99 years. This may cost $60 million to $75 million.

 

Source: The Straits Times 27 Nov 07

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