Four strata floors of commercial space in The Arcade (picture) were put up for sale yesterday by private owners amid an ongoing office supply crunch.
CB Richard Ellis (CBRE) and Jones Lang LaSalle (JLL), joint managers of the sale, are advising owners on the sale — by expression of interest — of approximately 32,120 sq m in strata area of the building.
According to CBRE and JLL, steady rentals can be expected in the short to medium term. The lease profile shows that 60 per cent of current leases will expire next year, suggesting rents could be renewed at substantially higher levels under the current tight market.
In the long term, property owners may also explore redevelopment options to maximise a potential plot ratio of 13.86, with current plot ratio at about 8.
The units in the 20-storey building in Raffles Place are a mixture of 999-year and 99-year leases. The mixed commercial and retail building consists of an office tower and three-storey retail podium with a total net lettable area of about 118,317 square feet.
Mr Colin Tan, head of consultancy and research at Chesterton International, said office prices had softened somewhat as evidenced in the recent land sales in the Marina View site.
Last week, Macquarie Global Property Advisors put in the winning bid of $779 psf per plot ratio for Land Parcel B in Marina View — about 45 per cent lower than the $1,409 psf bid it put in in September for an adjacent plot, also meant largely for office use.
“The Government has also been pushing out former government property for conversion into transitional office use. So, in the short term, the office market may be still tight, but in the medium term, it’ll definitely ease,” said Mr Tan.
The expression of interest exercise will close at 4pm on Dec 7.
Source : Today - 23 Nov 2007