Lehman Brothers and Japan-based Kajima Corporation said yesterday they will spend about $450 million

US INVESTMENT bank Lehman Brothers and Japan-based Kajima Corporation said yesterday they will spend about $450 million developing their upcoming office project at 71 Robinson Road.

The 280,000 sq ft building - aimed mainly at finance and banking companies - will be up by mid-2009, beating the nearby Marina Bay Financial Centre (MBFC) by about six months.

The price includes the $163.4 million the partners paid last year for the plot, which was the site of SingTel’s Crosby House.

Lehman and construction and property conglomerate Kajima have equal stakes in the venture.

The 15-storey building in the Central Business District (CBD) is designed to meet growing demand for space from global banks and financial institutions that want to establish or expand regional operations. For example, it will have purpose-built trading floors.

The building will come to market ahead of MBFC, which will offer some 1.6 million sq ft of office space in 2010. MBFC has proved popular with financial institutions but is not fully leased yet.

‘There is no question there is an advantage in being quick to market,’ said Chris Archibold, regional director at Jones Lang LaSalle (JLL), which is marketing 71 Robinson Road. Space in the building will be leased at ‘market rate’, he said.

The project will benefit from rising office rents in the CBD amid a supply shortage.

JLL’s research shows Singapore will have about 2.3 million sq ft of new office space over the next three years - far short of the 5.1 million sq ft that will be needed, which will push rents up.

In just the first half of this year, Prime Grade A office rents in the CBD rose 44 per cent to $13.80 per square foot (psf), JLL said. It expects rents to hit $15.80 psf by year-end.

71 Robinson Road is Lehman’s first direct property investment in Singapore, said Blake Olafson, senior vice-president of the bank’s global real estate group.

Kajima, on the other hand, has been involved in more than 200 projects in Singapore and has two luxury residential projects for launch - one at Balmoral and the other at Bishopwalk.

Source : Business Times - 20 Sep 2007