A joint venture backed by Australian property firm Lendlease has agreed to purchase a pair of ageing buildings in Singapore’s rapidly evolving Paya Lebar area for S$150 million ($111.5 million), with plans to build a sustainable commercial project on the site.
“We are looking to redevelop the site, which is within close proximity of Paya Lebar Quarter, into a green and sustainable development, optimising building technologies and digitalisation,” said Ng Hsueh Ling, Lendlease’s managing director for Singapore and chief investment officer for Asia. “We will announce further details when they are finalised.”
Lendlease is undertaking the project through a joint trust set up with Singaporean security firm Certis, with the trust having agreed to buy the property at 20 Jalan Afifi, known as Certis Cisco Centre, from the Temasek Holdings-owned company, according to public records.
Through the transaction, which has yet to be completed, the trust is paying S$1,152 ($856) per square foot for the 130,211 square foot (12,097 square metre) site, according to Urban Redevelopment Authority (URA) records.
Ageing Out of Service
Certis Cisco Centre consists of an eight-storey office block built in the 1980s and a seven-storey block completed in the 1990s. The site is on a renewable 30-year leasehold dating to 2013.
The property was zoned for use by institutions under the URA’s 2003 master plan, but was later rezoned as commercial after former government agency Certis Cisco was corporatised under the state holding firm in 2005.
After the plot ratio was increased from 2.5 to 3 in 2014, the site can now yield 390,633 square feet of built area, meaning the trust is paying S$384 ($285) per square foot of potential space.
Assuming that the existing buildings contain the maximum net lettable area of 325,528 square feet under the previous plot ratio of 2.5, the redeveloped site will provide 20 percent more NLA than the current property.
On Familiar Ground
Lendlease is no stranger to Paya Lebar, having previously developed the S$3.7 billion Paya Lebar Quarter mixed-use project, which sits within 350 metres (1,148 feet) of the Certis Cisco Centre site.
Completed in 2020, PLQ was a key catalyst to the URA’s master plan to transform Paya Lebar into a pedestrian-friendly new city precinct and sub-regional business district. The four hectare (9.9 acre) 99-year leasehold site features a retail mall, three residential towers and three office towers, with tenants including property consultancies JLL and CBRE and Singapore’s intellectual property agency, Ipos.
Keng Chiam Tan, who leads valuation and advisory services for Colliers in Singapore, describes the area around PLQ as undergoing large-scale rezoning and redevelopment as it transforms from an industrial hub into a commercial and residential neighbourhood. The evolution is due to accelerate as the nearby Paya Lebar Air Base shifts its operations to Changi Airport over the next decade and height restrictions ease.
“There are some big firms clustering around PLQ,” Tan, who grew up in the area, told Mingtiandi. “This is a good place to be, as it’s halfway between the city centre and the airport.”
Sydney-headquartered Lendlease increasingly sees its future in Asia. The ASX-listed firm announced in February that Singapore-based Tony Lombardo would become its new group chief executive from 31 May.
Lombardo, who is CEO of Lendlease’s Asia division, will take over the group helm from the retiring Steve McCann. Lombardo’s promotion followed several staffing moves made by Lendlease in 2020 to beef up its Asia Pacific leadership team.
In March of last year, the group brought aboard former Global Switch managing director Sam Lee as managing director for data centres, based in Singapore, as Lendlease sought to expand into the server farm market across Australia, China, Japan, Malaysia and Singapore.
Then in April, Lendlease announced the hiring of former Ikea executive Hui Ding as managing director for China, where the company has plans to build senior living projects. And in May, the group selected Gan Chong Min, a former managing director for fund management at CapitaLand China, as Lendlease’s managing director for investment management in Asia.