IT WAS the first multi-storey car park built in Singapore, and today serves the office-workers of Shenton Way with some 700 valuable parking lots.
But by the end of the year, it could be torn down to make way for an even more priceless commodity these days - office space. Plans are afoot to transform the iconic Market Street Car Park, built in 1964, into a Grade A office building possibly by 2011, according to CapitaCommercial Trust (CCT), the real estate investment trust (Reit) that owns the eight-storey edifice.
The move comes as a surprise as less than two years ago, the car park underwent a $14-million renovation that saw the old crowded sidewalk kopitiams replaced with hip air-conditioned food and beverage outlets.
Even so, the Reit manager has been constantly looking for ways to “enhance the value of its assets”, said CCT chief executive Lynette Leong.
The proposed redevelopment would both “maximise the full potential of the site which is currently under-utilised” and cater to financial and business institutions that want to be located “in the heart of the Central Business District”.
The plan is subject to financial viability and a decision should be made in “a few months”, Ms Leong added.
News that the building could be torn down, however, came as an unpleasant jolt to both motorists and the hub’s F&B tenants.
“It’s a pity as many people working in this area are dependent on the car park,” said Knight Frank property consultant Nicholas Mak. There are some 4,800 parking lots in the vicinity, according to CCT, and Mr Mak was concerned the loss of 700 lots could send parking fees rocketing.
The tight demand for prime office space has caused office rental rates as well as car park fees to escalate in recent years. Drivers now pay about $290 a month for season parking at the Market Street Car Park.
“(The closure) is unfair to us as rentals were recently increased following the renovations,” said Mr Eugene Chay, 35, who has been using the carpark for two-and-a-half years. He used to pay about $250 a month. “Where are we going to park if it is pulled down?”
Its centralised location has made it a favourite of many drivers, and those TODAY spoke to are not looking forward to being put on the waiting lists for other locations such as the Golden Shoe Car Park or AIA Building.
It was only “a few weeks ago”, said Ms Leong, that the Urban Redevelopment Authority (URA) granted CCT what it had been lobbying for for several years - the Outline Planning Permission (OPP) to redevelop a site. This allows the land use to be changed from transport to commercial use.
“This is the first REIT to have been granted it,” she said.
The lifting of the land use restriction is subject to two conditions: CCT will have to pay a development premium which is 100 per cent of the enhancement in land value, instead of 70 per cent. And there will be no extension of the existing land lease, which expires in 2073.
The new building can be as tall as One Raffles Quay, which hits 50 storeys, while the maximum plot ratio is 14.49 and the estimated gross floor area totals 850,000 sq-ft, said Ms Leong
The bill for CCT could be as much as $1.5 billion. Ms Leong said various ways of raising the funds would be explored — including a joint venture, setting up a business trust and issuing convertible bonds.
“If we go into joint venture with a partner, we may not have to issue new share units,” said Ms Leong, addressing one potential concern of the Reit’s shareholders. “Whatever we do, we are guided by the principle that we will not undertake any yield dilutive activity, so it will have to be yield accretive for our investors.”
She also revealed that CCT had been lobbying for the Golden Shoe Car Park to be granted OPP - but as the integrated hawker centre is owned by the Singapore Land Authority, this would be “trickier” and take more time.
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