Bedok Point Closure Lesson – Keep up or ship out

Back then, Bedok Point, newly opened in 2011, with 80,985 sq ft of retail space had all the advantages - a 10 minute walk from Bedok MRT station and interchange, and a slew of food and beverage outlets.

But then Bedok Mall, 220,000 sq ft of leasable floor area, came alone in 2013. Everything changed for Bedok Point since then. It could not compete – in terms of retail spaces, proximity to transport hub and even anchor tenants. It went downhill dying a slow death. Eleven years later, Bedok Point called it a day. A 10 minute walk from the station is considered too far for the modern Singaporean urbanite. That’s how it is. Even shopping malls need to keep up with expectations. Bedok Mall’s with its anchor tenants such as FairPrice Finest and Best Denki (electronics retailer) are a case in point.

Sold for $108 million, Bedok Point, with its four floors of retail space, will be torn down. It will make way for a residential development with commercial units on the ground floor.

Li Ka-Shing Sells Billion Dollar Shanghai Complex

Business is like art. It is complex, colourful and challenging. If you happen to be a Maestro like Li Ka-Shing, then your achievements will make you an ultra rich magnate.

A commercial complex under construction in Shanghai's Pudong district has been sold for 20 billion yuan (US$2.95 billion). 

The sale of Shanghai Century Link Tower, a large office and retail complex comprising two 34-story office towers and a shopping mall by Cheung Kong Property Holdings to a company majority owned by China Life Insurance Co, is expected to draw in a profit of 6.2 billion Hong Kong dollars (US$799 million).

The commercial complex has a total floor area of about 220,000 sq. meters.

Cheung Kong Property Group is unloading its assets in mainland China and Hong Kong to transition into the infrastructure business in Europe and elsewhere.

Chinese state media has critiqued Li, the chairman of Cheung Kong Holdings for withdrawing capital in its latest deal. 

Cheung Kong Property has deemed the sale an ordinary transaction.

Musical-Chairs Trending In The Office Sector

A major Japanese bank - The Bank of Tokyo-Mitsubishi UFJ (BTMU) - is in advanced talks to lease about 140,000 square feet of office space at Marina One, in spite of a generally subdued leasing market. BTMU currently occupies about 150,000 sq ft of office space in Republic Plaza. Though the take up space in Marina One is 10,000 sq ft lesser than at Republic Plaza, BTMU does not see it as a contraction of the bank's footprint, owing to more efficient space usage at the new development, due to bigger floor plates.

BTMU could be one of the first major office signings at M+S's Marina One project.

Marina One development will embrace 1.88 million sq ft of offices on levels 5 to 30 in two towers. Office floors in the East Tower will range from 35,000 to 43,000 sq ft, while those in West Tower will be 32,000-42,000 sq ft. The two towers will be connected on levels 28 and 29, creating 100,000 sq ft per floor.

According to industry insiders, gross effective monthly rents for big office occupiers at Marina One would probably be around $7 to $8 psf.

Meanwhile, Mitsubishi UFJ Securities, another entity of MUFG now sited in Republic Plaza, may join BTMU in migrating to Marina One.

Outside the CBD, Johnson & Johnson (J&J), a multinational corporation currently based at The Strategy in the International Business Park in Jurong East, is said to be finalising a lease for at least 170,000 sq ft of business park space at Ascent in Science Park 1 which will be completing this quarter. The lease is understood to be a long-term commitment of 10 years. J&J

According to market analysts, J&J could pay a gross effective monthly rental of about $5 to $6 psf at Ascent on a blended basis for the duration of the 10-year lease, against the approximate $3.50 to $3.80 psf it would pay if it will to renew its lease at The Strategy. However, for J&J, the relocation move could signify a flight-to-quality to a newer development, with an expansion built in.

Ascent located near Kent Ridge MRT Station, is a 7-storey building developed by Ascendas Land Singapore. It has a total net lettable area of 490,687 sq ft, of which about 90% is business park space. 

Abott has signed a lease for about 100,000 sq ft at the Duo. Abbot looks to consolidate its three locations - HarbourFront Centre in the Telok Blangah area, VisionCrest along Penang Road and Gateway in Beach Road - into one. MasterCard has also inked a 70,000-sq-ft lease at Duo, and is expected to exit Gateway.

Meanwhile, Guoco Tower has clinched Dnb Asia, a shipping and offshore financing solutions provider that is currently housed at the nearby Axa Tower, for a space of about 15,000 sq ft.

The musical chairs trend started to emerge last year, though most of the actual vacating of space will happen in 2017 and possibly 2018 because these tenants are precommitting to space in new buildings that will be completed in the second half of this year and early 2017.

The key drivers for this migration to newer office developments are a flight-to-quality and occupiers consolidating from a few locations. Addtionally, landlords of new developments are offering attractive rental terms to select tenants amid the competitive leasing environment.

The office leasing deals that are currently brewing are mostly expected to be renewals or relocations, rather than involving new entrants and expansions. This implies little growth, if any, in net demand for island-wide office space. 

Some foreign banks and tenants in the resources sector are in retreat and the overall weak global economic outlook is also denting office demand. This, coupled with the surge in new office completions over the next year or so, will continue to create downward pressure on rentals.

The spotlight now will be on the likes of ING, which is also in Republic Plaza, to see if it stays put or moves to a new development. In Centennial Tower, McKinsey & Co is mulling over whether to stay or move.

The World Bank, which is said to occupy about 16,000 sq ft at Marina Bay Financial Centre 2, is being courted by several landlords. The bank is understood to be looking for a bigger space of about 30,000-50,000 sq ft either in the same building or a new project.

There is still keen leasing interest in the market despite the economic uncertainty. 

Jalan Besar Plaza To Enbloc For S$390M

The 53,043 sq ft Jalan Besar Plaza is up for collective sale. Estimated selling price is S$390M or S$2,451 psf for the 35-year-old, freehold property.

 The 16-storey commercial and residential building is zoned under Commercial and Residential with a plot ratio of 3.0, under the 2014 Master Plan.

The tender will close on Jan 21, 2016. 53,043 sq ft.

CPF Building Sale Could Net $450m

The CPF Building in Robinson Road is up for sale and is expected to fetch around $450 million.

Completed in the 1970s, CPF Board initiated the sale of the building after it contracted a long-term lease agreement to rent space at Novena Square Towers A and B for its operations.

The tower with a frontage of 120m is located at the junction of Robinson and Maxwell Road. It enjoys unobstructed sea views and has a site area of about 47,056 sq ft, with net lettable area of about 324,000 sq ft.

The corner site is zoned commercial. It has a plot ratio of 12.88, inclusive of the bonus for land size and proximity to an MRT station. The height restriction is 50 storeys. This would mean a potential gross floor area (GFA) of over 600,000 sq ft, or over 24% more than the existing GFA.

The differential premium to maximise the GFA is about $75.5 million. The building's tenure is 99 years from 1968.

Nearby Developments

The immediate vicinity of Tanjong Pagar MRT station is currently undergoing rejuvenation. A good mix of new commercial, hotel and residential developments is being built.
A direct link from CPF Building to Tanjong Pagar MRT station is being envisaged by Urban Redevelopment Authority.

The area will continue to evolve. Imminent development of the Southern Waterfront City will commence when the container port is relocated.

Strong participation from local players and foreign developers are expected as the CPF Building is a rare opportunity to create a landmark development in an otherwise tightly held asset class.

The Urban Redevelopment Authority is also envisaging a direct link from CPF Building to Tanjong Pagar MRT station, which would enhance the building's connectivity.
The area will continue to evolve with the imminent development of the Southern Waterfront City when the container port is relocated.

Strong participation is expected from local players and foreign developers, as the CPF Building is a rare opportunity to create a landmark development in an otherwise tightly held asset class.

Source: Straits Times

Sale of 2 Commercial Projects By Expression Of Interest

Two commercial projects are going for sale by expression of interest:
1.    The entertainment complex at 1 and 3 Yuan Ching Road - commonly referred to as SuperBowl Jurong. 
Indicative asking price is S$20 million.

2.    A row of 5 adjoining shophouses at 142 to 150 (even numbers) Joo Chiat Road.
It has a total land area of about 7,503.58 sq ft.
Tenure of land to be determined upon closure of expression of interest.

SuperBowl Jurong Complex
The SuperBowl Jurong complex with a site area of 234,152 sq ft is part 2-storey and part 3-storey block, plus a pair of 2-storey blocks. It has a total net floor area of about 111,000 sq ft. 

The JTC Complex 30 years lease  starts from Jan 1, 2002. Occupancy rate stands at 99.6%. Tenants in the complex include Sheng Siong supermarket, McDonald's, Subway, and SuperBowl.

For operators in the lifestyle, entertainment and recreational industries, SuperBowl Jurong comes as a good fit. When the transformation is complete under the Jurong Lake District development plans, businesses will thrive even more. Things to look forward to will be the Singapore-Kuala-Lumpur high-speed rail terminus, the edutainment clusters, as well as park connectors and pedestrian linkages to be flashed out within the next few years.

Under the 2014 Master Plan, the site is zoned for "commercial and residential use".

Shophouses in Joo Chiat
The five adjoining shophouses in Joo Chiat Road totals about 7,503.58 sq ft in land size and comes with a plot ratio of 3.0. This allows up to a maximum gross floor area of about 22,510.74 sq ft.

It is zoned "commercial" under the 2014 Master Plan.

The vendor, a privately held investment holding company is evaluating whether to sell the property in its freehold tenure or to sell it on a 99-year leasehold basis. 

On a freehold basis, bids are expected to be in excess of S$14 million. 

The vendor is soliciting bids on a freehold and 99-year basis from prospective investors and will decide the tenure disposal after closing the expression of interest process.

Source: Business Times