Tuesday, September 26, 2006
[RealEdge] BT : SGX appoints Jones Lang to sell SGX Centre 1 space
| Published September 26, 2006  | |
| SGX appoints Jones Lang to sell SGX Centre 1 space THE Singapore Exchange (SGX) has appointed Jones Lang LaSalle (JL) to handle the sale of its space at SGX Centre 1 in Shenton Way, sources say. BT understands that JLL may launch soon an expression of interest or tender for the property. Market watchers reckon SGX could get about $200 million or $1,200 per square foot of net lettable area - or even more - given strong demand for offices and tight supply situation that is building up. The strata area of the space owned by SGX is said to be almost 200,000 sq ft and market watchers estimate the usable area could be around 170,000 sq ft. The area owned by SGX covers the second and third levels of the podium of SGX Centre as well as the 19th to 29th floors of the 29-storey SGX Centre 1. United Overseas Bank and Singapore Land own the rest of the space in the tower. The property is on a site with a remaining lease of about 88 years. Market watchers expect SGX to lease back the space from the new buyer for at least four to five years. After that, they suggest that SGX could move to other another location, especially the Business & Financial Centre's first phase when it opens in 2010. There should be no dearth of buyers for SGX's space given the hot office market. Real estate investment trusts like CapitaCommercial Trust, K-Reit Asia and Suntec real estate investment trust are all prospective buyers. As well, foreign property funds have been making a beeline for Singapore offices. In late June, a fully-owned unit of a pan-Asian property fund managed by CLSA Capital Partners bought the 35-storey SIA Building in Robinson Road for $343.88 million or $1,165 psf of net lettable area. In November last year, a Goldman Sachs real-estate fund bought DBS Towers 1 and 2 in Shenton Way for $690 million. Two months ago, SGX said it would seek proposals for the disposal of SGX Centre - which it has identified as a non-core asset - given the improved property market. The sale could take place within six months. After the North Tower of One Raffles Quay receives Temporary Occupation Permit next month, the supply of new office space in Singapore is expected to dip over the next few years, until BFC's first phase is completed in 2010. Property consultants say the occupancy rate for offices in the Raffles Place area has risen from around 87 per cent to 94.5 per cent over the past two years, while in the Shenton Way/Tanjong Pagar location, the increase has been from 86.6 per cent to 92.5 per cent. |
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