CDL said to have sold office block for $13m

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Published January 12, 2010

CDL said to have sold office block for $13m

Price for six-storey Jalan Besar building comes to $940psf of net lettable area

By KALPANA RASHIWALA


CITY Developments Ltd (CDL) is said to have sold another smallish office block, this time at the corner of Jalan Besar and Kitchener Road.

The Office Chamber is believed to have been sold for slightly over $13 million. This works out to around $940 per square foot of net lettable area on the six-storey freehold property's estimated net lettable area (NLA).

However, the buyer, believed to be a local investment company, is expected to refurbish the property extensively and this could see the NLA increase.

The Office Chamber's gross floor area is more than 22,000 sq ft.

In November last year, CDL sold nearly all of a 999-year leasehold office block at North Bridge Road for $46 million or about $1,194 psf of strata area.

Buyer ERC Holdings plans to spend $3.5 million to $5 million to renovate the six-storey block for use as a campus for private school ERC Institute.

DTZ, which brokered the sale of the North Bridge Road property, is understood to have handled the sale of The Office Chamber as well.

Hong Leong Finance used to be a tenant in The Office Chamber. The property is close to CDL's eco-themed City Square Mall, which opened late last year.

Supermarket chain NTUC FairPrice operates Singapore's first green supermarket at the mall.

Office rents on the island are expected to dip further this year, although at a much slower pace than over the past 15 months.

An unexpected flurry of leasing activity over the past few months has led some office industry watchers to predict a bottoming-out of office rents as early as the middle of this year.

Property consultants are predicting a return to positive office demand to the tune of more than one million sq ft this year on the back of economic growth.

But with over 2.7 million sq ft of new space slated for completion in 2010, vacancies will continue to rise and rents dip, albeit at a slower clip than last year.

Older buildings suffering a flight of tenants to new projects will still face a challenging time this year.