139 Cecil Street, which is undergoing a major refurbishment, has been put up for sale with an indicative price of S$210 million on a completed basis.
This works out to around S$2,470 per square foot (psf) based on the net lettable area (NLA) of about 85,000 sq ft post refurbishment.
The property is on a site with a 99-year leasehold tenure from Aug 20, 1981, which means the balance leasehold tenure will be about 62 years when the refurbishment works are completed next year.
The existing 11-storey office building is vacant and the seller has started major works to build additional floors, extending the block to 16 storeys.
After refurbishment, the asset will have offices, ground-floor food and beverage outlets and carpark facilities, in addition to a communal roof terrace with recreational facilities such as a swimming pool, gym, jacuzzi, outdoor dining area and cabana. The property will also have a mechanical carparking system that can accommodate up to 25 cars. The works are slated to be completed by the second quarter of 2018.
139 Cecil Street is owned by Ececil Pte Ltd, which in turn is 60 per cent held by entities owned by the Zhou family of Shanghai which controls the Shanghai Hengda Group.
The remaining 40 per cent is held by a joint venture between Vibrant Group and DB2 Group.
The property is being offered for sale through an expressions of interest exercise to be conducted by Cushman & Wakefield (C&W) which will close on May 25.
The property is on a site area of about 7,936 sq ft and is zoned for commercial use with an 11.2+ plot ratio (ratio of maximum gross floor area to land area) and a maximum height of 35 storeys, under the Urban Redevelopment Authority's Master Plan 2014.
C&W's executive director of capital markets Shaun Poh said that 139 Cecil Street's owner has obtained approval from the authorities to strata subdivide the new development into 99 office units and three retail units, so that the "incoming buyer has the option to sell the strata titled units when the market returns".
The Zhou family bought the next-door 137 Cecil Street, a freehold building, for S$210 million or S$3,109 psf on NLA in 2015.
Last year, another nearby freehold office block at 110 Robinson Road changed hands for S$45.1 million or S$3,169 psf on NLA; OCBC sold the property to Indonesian tycoon Tahir.
Another transaction in 2016 was CLSA Capital Partners' purchase of 77 Robinson Road, a 35-storey office tower, at S$530.8 million or S$1,810 psf on NLA of 293,269 sq ft; at the time, the site's balance lease tenure was about 76 years.
The Singapore office market has seen strong interest from investors, foreign and local.
Industry observers say all eyes are now on CapitaLand and CapitaLand Commercial Trust, which are still doing exclusive due diligence for the purchase of Asia Square Tower 2 along Marina View. The pricing is expected to be close to S$2,800 psf on NLA.
Mr Poh said that the office leasing market appears to be stabilising as evidenced by the marginal rental decline in the last quarter of 2016 and healthy take-up of new office projects such as Marina One, 5 Shenton Way and Guoco Tower. "The timing of the expected completion of the refurbishment of 139 Cecil Street would be ideal for investors seeking to ride on the anticipated office market upswing by mid-2018."
The Business Times