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Published March 23, 2011

Office block up for sale with $55-60m tag

By KALPANA RASHIWALA


A SEVEN-STOREY freehold office building at 22 Martin Road that is fully leased to AIG has been put up for sale. The indicative price is said to be $55-60 million, which works out to $1,740-1,899 per square foot on the building's existing net lettable area of 31,603 sq ft.


22 Martin Road: The price reflects a gross yield of 4.7- 5.1% based on annual gross rental of about $2.8 million

The price reflects a gross yield of 4.7 per cent to 5.1 per cent based on the annual gross rental on the property of about $2.8 million.

AIG's lease expires next year and the 10-year-old building, which has retail space on the ground storey and 29 carparking lots in the basement and ground levels, would make an ideal investment for an end-user as a corporate office building with naming rights, says Colliers International executive director of investment services Tang Wei Leng.

Colliers is marketing the property through an expression of interest exercise which closes on April 21.

'Recently, prime office space in the CBD has been transacted in the region of $2,300-2,500 psf. For instance, Capital Square recently changed hands at $2,300 psf, while four strata floors at Prudential Tower were sold at $2,430 psf. Both properties are of 99-year leasehold tenure,' Ms Tang observes.

The Martin Road property could be redeveloped into a new office building. Alternatively, Ms Tang notes, it could be converted or redeveloped into a boutique hotel, a residential block or a small office, home office (Soho) project - subject to approval from the authorities.

Under Master Plan 2008, the site is zoned for commercial use with a 2.8 plot ratio (ratio of maximum potential gross floor area to land area) and 15-storey maximum height.

22 Martin Road is understood to be owned by the Le Mercier family, which is involved in the high-end furniture business. The family is said to have purchased the property in June last year for $46.5 million.