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Published March 15, 2012

Shenton House, office units at Burlington Sq up for sale

Shenton Way site has $530m price tag; 66 strata-titled units asking for $101m

By MICHELLE TAN


TWO big-ticket commercial properties are up for sale this month.

Prime leasehold site Shenton House has been put up for collective sale, with DTZ being the sole marketing agent for the tender.

Located along Shenton Way, the property comes with an indicative price tag of $530 million, or about $1,720 per square foot per plot ratio (psf ppr), after factoring in an estimated differential premium of $73 million payable to the state to use the 11.76 plot ratio and an estimated $132 million lease upgrading premium to top up the site's lease to 99 years from the existing 56 years.

Notably, the site's 11.76 plot ratio is inclusive of a 5 per cent bonus plot ratio as the property's 36,350 sq ft (3,377 sq m) land area exceeds the 3,000 sq m eligibility mark. As such, the redeveloped property can be built up to a maximum gross floor area (GFA) of about 427,476 sq ft.

According to the Master Plan 2008, the plot is zoned for commercial use with a 11.2+ plot ratio and a building height control of up to 35 storeys.

Said DTZ's head of investment advisory services and auction, Shaun Poh: 'Given its strategic location, the subject site presents a rare opportunity for developers who are seeking prime redevelopment sites to develop an iconic development within the CBD area that will appeal to both Singaporeans and foreigners. In addition, the regular site layout also allows a developer to maximise the building efficiency and provides design flexibility for the new development.'

DTZ also highlighted that the Shenton House site could potentially be redeveloped into a mixed use development, subject to the relevant authorities' approval.

The sale of the Shenton Way property will be conducted via a tender exercise and will close on April 19.

The second property put on the block is the 66 strata-titled office units at Burlington Square. Colliers International is seeking expressions of interest for the 99-year leasehold units which straddle the fifth to 12th floors of the building.

Currently collectively owned by City Developments (CDL) and Wing Tai, they have an indicative price of about $101 million, or about $1,500 psf, and have about 83 years of lease remaining.

The total strata area amounts to about 67,738 sq ft, with individual units ranging from 549 sq ft to 5,221 sq ft, and represents about 35.4 per cent of the total share value of the development.

Collier's executive director of investment services, Tang Wei Leng, believes the key selling point of the property is its strata-titled status.

'Prime strata-titled office units are limited in stock and command an attractive average gross rental yield of 4 to 6 per cent. Hence, such units are highly sought after by both investors and business occupiers who prefer more control over their premises - driven further by the current low interest rate environment.'

Previously jointly developed by City Developments, Hong Realty - both subsidiaries of Hong Leong Group - and Wing Tai, the office units at the development are expected to be well-received on the back of the successes of properties such as PS100, Paya Lebar Square and The Adelphi.

The invitation to submit an offer for the strata-titled property will close on April 18.