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Published November 19, 2010

Raffles Place office building up for grabs floor by floor

One Finlayson Green strata offices tagged at $2,600-$2,800 psf

By KALPANA RASHIWALA


PROPERTY agent Jones Lang LaSalle is seeking interest on a strata-floor basis for One Finlayson Green, near Raffles Place MRT Station.

The fund which acquired the 19-storey freehold office block earlier this year has obtained in-principle approval from the authorities to have the building strata-titled floor by floor ahead of the proposed sale.

Based on the indicative price of $2,600-$2,800 per square foot of strata area for the building's office space and assuming that at least $4,000 psf is achieved for the retail space on the first two levels, the total price tag would work out to nearly $280 million.

That would represent a handsome profit for the vendor, Lucrum APS100, the fund that owns the building. It is said to have paid about $145 million for the 19-storey freehold office block in March this year; that deal was effected by a sale of shares in the company owning the asset.

After taking into account fees and other expenses, the final cost to the Lucrum fund was thought to be about $155-157 million or $1,742-1,764 psf based on a net lettable area of about 89,000 sq ft.

However, by now packaging the saleable area on a strata floor basis, the current owner would be able to include 'circulation areas' like lobbies and toilets - ramping up the building's total saleable area to 96,132 sq ft.

Jones Lang LaSalle is the sole marketing agent for the property in Singapore and South-east Asia. Colliers International is the agent for North Asia.

Among the recent benchmarks for Grade A strata office transactions is the $2,333 psf fetched for 11,744 sq ft on the 30th floor of Suntec Tower Two last month and $2,450 psf for a 2,928 sq ft space at Suntec Tower Three in September.

Closer to One Finlayson Green itself, at Samsung Hub, Ho Bee sold four floors (levels 8 to 11) in the 999-year building at $2,125 psf in August, and is understood to be seeking about $2,700 psf for its remaining three office floors (levels 12-14) in the tower.

Ho Bee also recently sold two shop units on Samsung Hub's ground floor at slightly over $14 million or about $2,680 psf.

However, JLL is pegging its asking price for One Finlayson Green's first two levels of retail space to the $4,021 psf that was achieved a few months ago for Malacca Centre's retail space. 'We therefore expect interest for the retail space at One Finlayson Green to be in excess of $4,000 psf,' says Stella Hoh, head of investments at JLL.

One Finlayson Green's typical office floor plate is 6,437 sq ft; the top floor is 5,586 sq ft. The building has 22 car parking lots on levels three and four.

'We expect strong interest in this building across a wide investor base, from institutional investors to high net worth private investors and owner occupiers. Within the CBD, there are limited investment opportunities in the Grade A office strata title market on a floor-by-floor basis. Most activities within commercial buildings in the CBD have been limited to purchases of entire buildings,' Ms Hoh added.

However, One Finlayson Green's owner is open to selling the building on an en bloc basis if the price offered is attractive. Market watchers, however, reckon the psf prices offered by potential buyers are likely to be higher on an individual floor basis.

The expression of interest exercise for the building, whether on an en bloc or strata floor basis, closes on Jan 12.

The building was completed in 1994.

Hong Leong Group sold the building in 2007 for about $230.1 million to a unit of UK-based property fund group Develica, which in turn sold the asset to the Lucrum fund in March this year. Lucrum was started by Indonesian investor Norman Winata.