Renovation works to Chevron House’s retail and office podium are due to finish next year
Just four months after Oxley Holdings agreed to sell 30 Raffles Place in Singapore’s central business district to AEW for S$1.025 billion ($740 million), the Singapore-based company has moved to find a buyer for the building’s retail and office podium as part of its sale and purchase agreement with the US real estate fund.
Among the conditions for completion of the deal struck between the two parties on 29 April is that Oxley must complete a $100 million refurbishment of the skyscraper formerly known as Chevron House and find a buyer for the building podium, according to people familiar with the matter who spoke with Mingtiandi.
The seven-storey podium, which sits at the foot of the 32-storey tower, is composed of both retail and office space and is being offered for sale in five strata lots which can be purchased individually or collectively and which combined could fetch S$475 million.
“Singapore’s commercial real estate has witnessed a wave of interest from international property players in recent times, particularly investors from Hong Kong such as family offices and high net worth individuals,” said Cushman & Wakefield’s executive director of capital markets, Shaun Poh. “This sale presents yet another opportunity for foreign players to invest in a trophy asset.”
30 Raffles Place is currently undergoing extensive enhancements that include upgrading the facade and converting the mall’s car park into retail space, with the renovations due to be completed in the first quarter of next year.
As joint agents, JLL and Cushman & Wakefield are marketing the property, on behalf of an Oxley subsidiary, through an expression of interest exercise closing on 10 October.
Opportunity to Invest in a Singapore Landmark
Two lots of retail space, which cover a combined net leasable area of 51,376 square feet (4,773 square metres) and 61,514 square feet of gross floor area spread across the podium’s lower four storeys — including two basement levels, are on offer at a guide price of between S$5,000 and S$5,500 per square foot of net leasable area, making the lower section of the podum available for a total asking price of S$283 million.
The retail space is already 80 percent leased to a mix of domestic and international tenants including food and beverage outlets, fitness providers and other shop operators.
Oxley boss Ching Chiat Kwong is hoping for a quick sale
The common walkway in the podium forms part of the strata retail space, giving the owner potential additional income from media screens, advertising spaces, event spaces and ATM machines.
The 58,286 square feet of office space, which occupy the top three floors of the podium, are being offered vacant in three lots at a guide price of between S$3,000 to S$3,300 per square foot, which could bring in a combined S$192 million.
With the offices visible from bustling Raffles Place and connecting directly to the subway station, the marketing agents said that owner-occupiers or tenants could potentially gain permission for signage facing onto the square.
“The level 3 to 5 office podium will suit an owner-occupier who is looking to acquire a premium office space with superior specifications and excellent visibility in the heart of Singapore’s CBD,” said JLL’s senior director of capital markets, Clemence Lee, adding that the retail space is a rare opportunity to acquire a new income-generating retail asset in a high traffic location.
Investment Demand as Rents Rise
The announcement of the sale comes after a string of acquisitions in Singapore as grade A office rents in the city’s business district hit a ten-year high in the second quarter of this year, growing over 12 percent compared to the same period of 2018 to reach an average of S$9.93 per square foot per month, according to Colliers International.
Just three weeks ago, Arch Capital Management completed its acquisition of Anson House in the city’s Tanjong Pagar area for S$210 million, paying S$2,400 per square foot for the 86,200 square foot office block.
A month ago, local real estate investment house Sun Venture bought 71 Robinson Road from a unit of Germany’s Commerzbank for S$744 million, paying roughly S$2,756 per square foot for the 237,644 square foot property.
Two days before that deal, Gaw Capital and Allianz announced that they had paired up to buy the Duo complex in Singapore’s Bugis area for S$1.6 billion, netting the new owners 557,972 square feet of office tower and retail gallery for S$2,590 per square foot.
Oxley Holdings agreed to sell 30 Raffles Place to AEW in April in a S$1.025 billion deal that represents a more than 35 percent increase in capital value over the S$660 million that Oxley had paid to acquire the 1993-vintage tower in March 2018.
Leave a Reply