OUB Centre to get $540m adjacent office tower
http://www.businesstimes.com.sg/sub/...98607,00.html?
Published September 26, 2008
OUB Centre to get $540m adjacent office tower
Development will add 350,000 sq ft of prime Grade A space in 2011
By EMILYN YAP
UNITED Overseas Bank and OUB Centre will invest $540 million to jointly develop a new commercial tower in the heart of Raffles Place.
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Towering addition: The 38-storey development will take shape next to the existing OUB Centre tower and retail mall. The three components will together be known as One Raffles Place
The 38-storey development will take shape next to the existing OUB Centre tower and retail mall. The three components will together be known as One Raffles Place.
Due for completion in 2011, the tower will provide 350,000 square feet of prime Grade A office space.
The site has a remaining tenure of around 75 years but there are plans to top this up to 99 years.
The $540 million investment excludes land cost and will be financed through syndicated loans from several financial institutions.
OUB Centre, which counts Overseas Union Enterprise, UOL Group and the Kuwait Investment Office among its shareholders, owns an 81.54 per cent stake in the partnership.
An anticipated economic slowdown and the US financial turmoil have affected outlook for the office property sector.
UBS Investment Research said in a report on Tuesday that demand for office space could weaken in the next 12 months as global financial institutions consolidate.
Prime office rents could be down as much as 47 per cent in 2012, it said.
But such forecasts have not dampened OUB Centre's confidence in the new tower.
'This is a long-term investment,' said its general manager, Henry Kok. 'This tower marks another milestone and reflects our confidence in Singapore's growing business scene and this location.'
Marketing of the new building has started and target tenants include financial institutions and multinational companies.
Despite on-going consolidation within the financial sector, Mr Kok pointed out that 'some financial institutions are expanding quite aggressively . . . the gravity is slowly shifting to Asia'.
The new tower and the existing OUB Centre building will offer 760,000 sq ft of prime Grade A office space in total.
The OUB Centre building is near full occupancy and rents range from $17.50 to as close as $20 psf per month, Mr Kok said.
The principal architect for the new tower is Paul Tange, president of Tokyo-based architectural firm Tange Associates.
He is the son of Kenzo Tange, who designed the original OUB Centre tower more than 20 years ago.
38-storey tower to rise at Raffles Place
http://www.straitstimes.com/Money/St...ry_282714.html
Sep 26, 2008 Friday
38-storey tower to rise at Raffles Place
New development will cost $540m and is due to be completed in 2011
By Fiona Chan, Property Reporter
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Artist's impression of the new tower that will come up next to the OUB Centre. The tower will offer 350,000 sq ft of top-quality Grade A office space and five floors of shops. -- PHOTO: TANGE ASSOCIATES ASIA
A NEW office block will soon come up next to OUB Centre, with the two buildings to be packaged in a single prime development called One Raffles Place.
The tower, due to be completed in 2011, will offer 350,000 sq ft of top-quality Grade A office space and five floors of shops, said OUB Centre Limited, which is developing the 38-storey building along with United Overseas Bank (UOB).
Although none of the space has yet been leased, the company is not too concerned about securing tenants despite a large supply of new offices looming over the market next year and beyond.
'This development is a long-term investment, we are confident of the location and the address, and we are confident of Singapore's economy,' said OUB Centre general manager Henry Kok yesterday.
Even amid the financial turmoil, Singapore office space is still in demand, added Mr Chris Archibold, regional director and head of markets at Jones Lang LaSalle (JLL), one of the building's leasing agents along with CB Richard Ellis.
'We are still seeing quite a number of expansions in the financial services industry, jobs being relocated to Asia out of Europe and the United States.'
The new block will cost $540 million to develop, which will be financed by a syndicated loan from financial institutions, said Mr Kok. OUB Centre's shareholders are Overseas Union Enterprise, UOB, UOL Group, Khattar Holdings and the Kuwait Investment Office.
While none of the parties involved would reveal expected rents for the new building, JLL's managing director for Singapore and South-east Asia, Mr Christopher Fossick, said rents would be pegged to the 'market rate' for Raffles Place.
Asking rents for Grade A offices in the area, including at the existing OUB Centre, are roughly between $17.50 and $18.50 per sq ft (psf), said Mr Donald Han, managing director of property consultancy Cushman & Wakefield.
But he said rents for the new tower will 'have to reflect the expected market situation in 2011, given the supply coming onstream in 2010 and beyond'.
However, with the building's high specifications, he still expects rents to be 'near the top of the range'.
'There will always be a demand for buildings like the new OUB tower, as the Raffles Place location will be the first stop for companies moving to Singapore.'
Other new upcoming offices in Raffles Place include the 28-storey Straits Trading Building in Battery Road, whose redevelopment will be completed by this year, and Ocean Building in Collyer Quay, due for completion in 2011.
The OUB tower, with smaller floor plates of 11,000 sq ft, will target tenants with smaller space requirements, said Mr Fossick. 'There's been an enormous explosion of hedge funds, investment management groups and private banks, who take 5,000 sq ft to 20,000 sq ft of space.'
In an interesting twist, the new tower is being designed by Japanese firm Tange Associates' Paul Tange, the son of Mr Kenzo Tange, who designed the original OUB Centre more than 20 years ago.
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