The expression of interest exercise for the property at Church Street will close on 18 February 2011 and DBS believes it can attract more interest from institutional investors, due to the positive office market outlook in Asia, including Singapore.
Some market analysts expect that bids for the property could fetch between S$2,300 psf and S$2,500 psf, valuing it at around S$889 million to S$1 billion.
Capital Square, which was built in 1998, is located on a site with a remaining leasehold term of 84 years. It comprises a 16-storey office tower with a total net lettable area (NLA) of 386,525 sq ft. It also features two rows of conservation shophouses and 362 parking lots.
The property is currently owned by Munich Re and Ergo and managed by MEAG Pacific Star Asset Management, a joint venture company between Pacific Star and MEAG, the asset manager of Munich Re and Ergo.
DBS said that with strong recovery in the capital value and the current cap rate compression, commercial landlords should expect an uplift in RNAV.
Source: Commercial Guru
