EQUATION Corp has clinched a state property at Bukit Ho Swee for the stately rent of $90,000 a month. The Singapore Land Authority (SLA), which manages the property, said that this is twice the guide rent when the former community centre was put up for tender in June.
The building is on 40,892 sq ft of land and has a gross floor area of 27,361 sq ft. At $90,000 a month, the rent works out to $3.30 per sq ft (psf) per month. Deloitte & Touche Management Services put in the second highest bid of $54,700 a month.
Equation Corp - formerly Heshe Holdings - could not be reached for comment. But another company that clinched two other state buildings - a former childcare centre in Balestier and a former school at Toa Payoh - said that it is likely to offer these as office space.
Vita Holdings chief financial officer Kwek Siew Hwee said that her company has leased about a dozen state buildings and rented out 80 per cent of the space to tenants. Vita, through its subsidiary Whitehouse Holdings, bid $101,788 a month for the former school at Toa Payoh. After refurbishing the building, it hopes to achieve rent of $5-6 psf per month. ‘We expect to recover our cost in about six years,’ Ms Kwek said.
Whether Equation Corp plans to rent out the former community centre at Bukit Ho Swee is not known, but Savills Singapore director (commercial) June Chua reckoned that the space could fetch $8-9 psf a month after it is refurbished. Proximity to Tiong Bahru MRT station is its main attribute, she said, adding: ‘This site could fetch a premium because it’s an established office location.’
The rent may seem high considering that average prime office rent is $12-13 psf a month. But the supply crunch is exerting increasing upward pressure on rents, Ms Chua said.
Rents for some prime buildings in Raffles Place have now hit a record $18 psf per month. ‘It would not be impossible for some of these prime properties in Raffles Place to cross the $20 psf a month barrier next year,’ she said.
Other bids received by SLA include $288,999 a month or $1.30 psf per month from RichZone Properties for a former school in Alexandra Road, and $200,000 a month or $1.25 psf per month from Hean Nerng Investments for the former Gan Eng Seng School at Raeburn Park.
Source : Business Times - 20 Oct 2007