Friday, July 18, 2008

Office Space Slump? 2 State-Owned Sites Pull In Strong Bids

Source : The Straits Times, July 18, 2008

THE former Ministry of Home Affairs complex at Phoenix Park is set to be transformed into an 'iconic integrated office complex' with restaurants and other facilities.

The plans were unveiled by LHN Facilities Management, which was awarded the right to lease the Tanglin Road site by the Singapore Land Authority (SLA) yesterday.

LHN's managing director, Mr Kelvin Lim, added that perks like a shuttle service to the nearby Redhill MRT station would help to attract government agencies and private companies which need space outside the Central Business District. The property comprises 24 low-rise blocks.

LHN, which specialises in converting old properties for new uses, offered $368,888 a month - more than double the $165,000 guide rent. A total of 11 bids were received for the site.

Another state-owned site awarded for lease by the SLA, the former Monk's Hill Secondary School at Winstedt Road, is also set for a makeover.

The top bid came in from marine engineering firm Allbest Equipments at $211,328 a month - 40 per cent more than the guide rent of $147,300.

Allbest is retaining only 5 to 10 per cent of the built-up space for its own office needs and will rent out the rest.

The company will spend about $4 million doing up the building and expects to lease space to medium-sized businesses at $8 to $10 per sq ft, said Mr Chan Cheong Hoy, general manager of Allbest.

The strong interest in the two state-owned sites shows that despite the torpor in the property market, demand for office space in the prime area appears to be going strong.

The two buildings pulled in offers that were well above their guide rents, SLA said.

Both companies plan to sub-lease most of the space in these buildings, believing that office demand will remain healthy.

These two properties are the first that SLA has leased out this year. The agency will put up another two sites, also for office use, in the coming months.

One is a former police post at 11 Kelantan Road, which has a gross floor area of 1,905 sq ft. The other is the former Pacific Can Building at Cecil Street, a vacant two-storey property with a total floor area of 19,482 sq ft.

No comments: