Move comes as concerns rise over Raffles Place’s parking crunch.
MORE premium office space may soon be offered in Raffles Place - at the expense of fewer parking lots in an area where drivers often battle to find a spot to park.
Property trust CapitaCommercial Trust (CCT) yesterday announced plans to redevelop Market Street Car Park (MSCP) into a $1.5 billion office building.
CHANGE IN THE WORKS: The Market Street Car Park opened in 1964 and was Singapore's first multi-storey carpark. The eight-storey building, which offers 704 parking lots and 46 shop units on the first two levels, is one of the largest carparks in the Central Business District. It was recently refurbished for $14 million.CCT chief executive Lynette Leong said outline planning permission from the Urban Redevelopment Authority came ‘in the last few weeks’.
This is on condition that the property will be developed for office use only, with retail space on the first storey, Ms Leong said.
CCT estimates the total cost to be $1 billion to $1.5 billion, depending on the development charge.
‘The decision to proceed is subject to its financial viability,’ said Ms Leong.
CCT is looking into a joint venture or a possible business trust to finance the investment, she added.
MSCP, with a land area of 5,478 sq m, opened in 1964 and was Singapore’s first multi-storey carpark.
The eight-storey building, which offers 704 parking lots and 46 shop units on the first two levels, is one of the largest carparks in the Central Business District (CBD).
It was recently refurbished for $14 million.
This is the first time a property trust is redeveloping a carpark into an office space, said CCT.
The move comes amid concerns that Raffles Place’s carpark crunch is worsening.
Early last year, it was reported that about 2,000 lots in the CBD area could disappear in the next few years, as development plans took shape.
Newer buildings tend to have fewer lots due to the higher revenue that office space generates.
A CCT spokesman confirmed that the new office building would not offer as many lots as MSCP.
If the project goes ahead, CCT will begin construction by year-end or early 2009 and complete the building within four years.
Ms Leong said CCT was preparing to give notice to its tenants and season-parking holders, pending project approval.
CCT said the new tower would be ‘as tall as One Raffles Quay’, with a gross floor area of 850,000 sq ft and a maximum plot ratio of 14.49. It expects to achieve monthly rentals of $12 to $14 per sq ft.
The office sector has had a bull run, with Grade A office rents up 96 per cent, CB Richard Ellis said recently. There are concerns, however, that Singapore will face a supply glut from 2010.
Still, analysts that The Straits Times spoke to were bullish about the project.
If Singapore’s economy keeps doing well, the market will be able to absorb this much supply, said Mr Ku Swee Yong, director of marketing and business development at Savills Singapore.
‘But the carpark crunch will be even worse now.’
Mr Colin Tan, Chesterton International’s head of research, said while the project could be ‘a bit late,…in the long term, this is a sound investment due to its prime location and proximity to the new Marina Bay Financial Centre’.
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