CPF Board's Land Up For Sale

Commercial MARKET

CPF Board's space at 79 Anson Rd up for sale

THE Central Provident Fund Board has put its space at the freehold 79 Anson Road up for sale. The price expected to be achieved for the mostly office space is at least $2,000 per square foot on strata area of 100,007 square feet, or $200 million.

The net lettable area of CPF Board's space is 88,636 sq ft based on the current leasing configuration.

79 Anson Road, about 250 metres from Tanjong Pagar MRT Station, is a 23-storey building that received Temporary Occupation Permit in 1992.

The space being offered by the CPF Board comprises eight levels of office space (spanning levels 16-23) and a ground-floor retail unit facing Anson Road.

The space comprises 17 strata titles, with most floors having two separate strata titles of about 4,746 sq ft and 6,339 sq ft each. The board's space equates to 43.81 per cent share value for 79 Anson Road.

The rest - held by German fund manager SEB - comprises strata units on levels 1 and 5-15 with a total of 22 strata titles representing a total strata area of 117,423 sq ft.

79 Anson Road's existing gross floor area (GFA) of 289,185 sq ft slightly exceeds the 275,369 sq ft based on the 8.4 plot ratio designated for the 32,782 sq ft site under Master Plan 2008. The site is zoned for commercial use and can be built up to 35 storeys.

SEB is also understood to be open to selling its space in the building, say market sources.

Assuming a new development on the site is allowed to retain the existing 289,185 sq ft GFA, the $200 million price expectation for CPF Board's space in the building, depending on the price the buyer pays for the lower floors owned by SEB, could equate to something close to a unit land price of $1,450 psf per plot ratio.

This would be in sync with the $1,420 psf ppr for the transaction of the freehold Tower 15 at Cantonment Road in May.

Even if SEB were to sell its space to the buyer of the CPF Board's space in 79 Anson Road, the property cannot be demolished immediately, as an anchor tenant that occupies around 75 per cent of CPF Board's space recently renewed its lease till early 2016.

The board's space is currently fully leased with a passing rent averaging $5.84 per square foot per month - translating to a 3 per cent net yield. This should help fund the interest expense on borrowing for the potential buyer.

Some potential buyers may also be keen on acquiring CPF Board's space as an investment property yielding a steady flow of rental income. The space may also interest organisations looking for a flagship or HQ property.

The site could also attract buyers keen on further strata titling the space into smaller units for sale. New strata offices in the vicinity have reached $2,800 psf to $3,100 psf.

Recent successful strata office title launches in the vicinity include PS 100, Eon Shenton, Robinson Square and Oxley Tower.

A big draw of 79 Anson Road would be its generous carpark provision with 145 lots on levels 2-4.

Source: Business Times – 18 September 2012