The price works out to S$1,450 to S$1,500 psf on net lettable area, and is 30% lower than what the owner paid for it in 2015.
SINGAPORE] A 14-storey office building at 158 Cecil Street, on a site with a balance land tenure of about 55 years, is understood to be quietly on the market at an indicative price of S$165 million to S$170 million.
This is about 30 per cent lower than the S$240 million that an entity linked to the late Denis Jen – a Singapore citizen known for investing in shopping centres in Australia – paid for the Singapore office block a decade ago.
The Business Times understands that Jen’s children are spearheading a potential sale of the asset via property brokers.
The indicative price range reflects S$1,450 to S$1,500 per square foot (psf) on the building’s net lettable area of about 113,540 sq ft.
Word on the street is that CBRE ran a private treaty process last year to find a prospective buyer.
Formerly known as The Spazio and Dapenso Building, the property underwent a major revamp that was completed 16 years ago.
Further asset enhancement works were finished about six years ago.
The property is on a site with 99-year leasehold tenure from January 1982, leaving a balance of about 55 years.
The building’s occupancy is currently at 80 per cent; tenants include Bank of India, Endowus and Airbnb.
Airbnb will be relocating to CapitaGreen later this year.
Current rents at 158 Cecil Street are about S$7 psf a month.
Market watchers said a sale of the building may help to establish values of Singapore Central Business District (CBD) office buildings on sites with less than 60 years’ balance lease.
The existing 128,922 sq ft gross floor area (GFA) of 158 Cecil Street is the maximum allowed for the 11,512 sq ft site, based on the 11.2 plot ratio for the site in the Urban Redevelopment Authority’s (URA) Draft Master Plan 2025. The site is zoned commercial.
Observers noted that the site area, which works out to about 1,070 square metres (sq m), would not meet the minimum 2,000 sq m requirement for a non-corner site in this locale to qualify for the URA’s CBD Incentive Scheme.
Under the scheme, additional GFA is granted to encourage the conversion of older office buildings in some parts of the CBD into mixed-use projects with a wider diversity of uses – including residences and hotels.
If UOB, which owns the Far Eastern Bank Building next door at 156 Cecil Street, were to buy 158 Cecil Street, the combined site area would qualify for the CBD Incentive Scheme.
On its own, 158 Cecil Street may still offer a potential investor room for repositioning – for instance, by being redeveloped into a hotel, if the URA approves such a plan.
However, this would incur a land betterment charge payable to the state and construction costs.
A company linked to Jen bought 158 Cecil Street in 2015 from a fund managed by Alpha Investment Partners, which in turn had purchased it for S$235.5 million in 2007 from KOP Properties.
That acquisition was a forward purchase, with KOP undertaking to complete a major refurbishment of the then nine-storey building.
The revamped asset was delivered in 2009 to Alpha, which then positioned it as a green building; its features include a soaring indoor vertical gard
Business Times