CapitaCommercial Trust (CCT), along with CapitaLand, plans to redevelop Singapore’s oldest multi-storey carpark — Market Street Car Park (MSCP) — into a Grade A office tower for an estimated S$1.4 billion, or S$1,900 psf of net lettable area (NLA).
When completed in end-2014, CCT said the market can expect an “ultra-modern” Grade A office tower designed by renowned Japanese architect Toyo Ito. It will have a gross floor area (GFA) of approximately 887,000 sq ft, across an estimated 40-storey tower.
The trust, which has a total asset of S$6 billion as of 31 March, said it is still in discussions with CapitaLand to form a joint venture (JV) for the project. It noted that the trust needs a partner because under official guidelines, the total contract value of a property project or investment in an incomplete property project undertaken by a Reit should not exceed 10 percent of its total asset size.
The carpark was built in 1964 and plans to redevelop the site have been held back for over 15 years. It was only in 2008 that the government granted permission for the redevelopment plan but it was again deferred in 2009 due to the financial crisis.
“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,” said Ms. Lynette Leong, Chief Executive of CCT’s manager.
In addition, CCT posted weaker Q1 results yesterday, as the sale of Starhub Centre and Robinson Point, as well as the asset enhancement works at Six Battery Road, affected the trust’s Q1 earnings.
For the first quarter, CCT reported a 9.9 percent drop in net property income to S$69.9 million, while distributable income slipped 4.1 percent to S$52.1 million.
“The portfolio continues to perform well, except for Six Battery Road which contributed lower revenue due to expected vacancies to facilitate the asset enhancement works and negative rent reversions given lower market rental rates compared with the expired rentals,” said Ms. Leong.
Source: Commercial Guru
