CapitaCommercial Trust is preparing to spend up to S$1.5 billion to convert the Market Street Car Park into an office tower.
Whether the project will go ahead or not depends on feasibility studies, but a major regulatory hurdle has been cleared. The URA has lifted restrictions for the site, which originally requires the land to be used mainly for car parks.
CapitaCommercial, which owns the car park complex, plans to build a 240-metre-high office tower on the site, with an estimated total gross floor area of 850,000 square feet.
The new project comes despite the building was only renovated in 2006 for some S$14 million.
"We plan to redevelop this into a state-of-the-art Grade A office building to cater to the demand of tenants such as financial and business institutions," said CapitaCommercial Trust's CEO, Lynette Leong.
But this redevelopment is subject to conditions.
The trust will have to pay 100 per cent of the enhancement in land value, and will not be allowed to extend the existing lease on the site beyond 2073.
The usual charge is 70% of the enhanced value.
The entire project is estimated to cost between $1 billion and $1.5 billion.
CapitaCommercial Trust says it will study financing options, like a joint venture, business trust or even issuing convertible bonds.
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