A BUILDING which could become Orchard Road's most expensive office property has been put up for sale for at least $1 billion.
The Atrium@Orchard, above the Dhoby Ghaut MRT station, is being sold by the Singapore Land Authority.
If it attracts an expected price of at least $2,700 per sq ft (psf) of net lettable area, it will be the most expensive office property in Orchard Road, said CB Richard Ellis (CBRE), which is handling the sale.Boasting two office towers of seven and 10 storeys, and ground floor retail space, the property has a net floor area of 34,620 sq m. It will be sold with a fresh 99-year lease. Anchor tenants at the Grade A office building include Temasek Holdings, Barclays Capital and MTV Asia.
The expected yield on the property, which has a mix of new and old leases, is about 2.5 per cent. Foreign funds and even Singapore real estate investment trusts are expected to show interest, said CBRE's executive director for investment properties, Mr Jeremy Lake. Upon rent renewal, the property's yield could go up to 4.5 per cent, he said.
'The absence of new office supply coming up in Orchard Road will fuel rental growth,' said Mr Lake. Just one new building VisionCrest is slated to be built in the nearby Oxley area.
Current office rents at The Atrium@Orchard are around $14 to $16 psf while the retail space is going for about $17 to $20 psf, said Mr Lake.
The sale of The Atrium @ Orchard is by an expression of interest exercise that will close on Feb 22. Its expected price is similar to One George Street, an office building on the fringe of Raffles Place.
The current record for the sale of office space is$2,780 psf of net lettable area - set in August by a Goldman Sachs-linked fund when it bought Chevron House in Raffles Place.
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If Atrium@Orchard attracts an expected price of at least $2,700 psf of net lettable area, it will be the most expensive office property in Orchard Road, says CBRE.
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