http://www.businesstimes.com.sg/real...-s500m-sources

Bids for CPF Building top S$500m: sources

Two of the highest bids said to have possibly come from Ascendas-Singbridge and Richard Li's PCPD

By Kalpana Rashiwala

[email protected]

@KalpanaBT

Nov 19, 2015


BIDS for the CPF Building at 79 Robinson Road have gone past S$500 million - surpassing the S$450 million that market watchers were expecting when the tender for the ageing office block was launched two months ago, BT understands.

The tender exercise, which closed on Oct 28, is said to have drawn fewer than 10 bids. The two highest offers came in close to each other - one from a Singapore party and the other from a foreign bidder.

Word in the market is that the two most aggressive bids could have come from Ascendas-Singbridge, and Richard Li's Pacific Century Premium Developments (PCPD), which is listed in Hong Kong and majority owned by PCCW.

With a small price gap between the top two bids, the conditions offered by the respective bidders could be the determining factor for the award, said market watchers.

When contacted, a spokeswoman for the Central Provident Fund (CPF) Board, which owns the building, reiterated that "bids are currently being evaluated".

CBRE, which the board appointed to market the building by tender, declined to comment.

PCPD is believed to be seeking to increase its exposure to Asean countries. In 2013, it acquired a site in Jakarta's Sudirman Central Business District, on which it is building a 40-storey premium Grade A office tower, where Citibank last month signed a lease for some space.

In Hong Kong, PCPD holds the development rights for the Cyberport project, which is owned by the government of the Hong Kong Special Administrative Region and includes the prestigious Bel-Air residential development. PCPD also holds the first right of refusal to join with PCCW to redevelop PCCW-owned telephone exchange buildings into residential and/or commercial properties.

PCPD is said to be looking for a commercial property investment in Singapore, preferably one that involves a development or redevelopment opportunity. The CPF Building, which is about 40 years old and has substantial untapped gross floor area (GFA), would fit the bill. Morever, the site's balance land tenure of about 51 years - CBRE is said to have indicated to prospective buyers during the marketing process that it does not believe a lease top-up by the authorities will be forthcoming - may deter some Singapore property groups but should not be an issue for the Hong Kong group, which would be used to shorter land leases in Hong Kong and China compared to the typical 99-year tenures in Singapore.

Talk of Ascendas-Singbridge's participation in the tender for CPF Building is also noteworthy. If it clinches the property, it will be its first office asset in Singapore. Overseas, the group owns Ascendas Plaza in Xujiahui, Shanghai - comprising a 30-storey Grade-A office building with five-storey retail podium. The group's portfolio also includes four office buildings in South Korea - Anam Tower in Gangnam, Signature Towers Seoul (in the core CBD area of Seoul and which has a retail element), Citibank Center and West Finance Center (both also in Seoul).

Ascendas-Singbridge could be eyeing prospects of assembling an office real estate investment trust (Reit) in the medium term, suggest industry observers. It has an industrial/business space Reit and a hospitality Reit.

Not all bidders at the tender bid aggressively. At least one party is said to have made a lowball offer of around S$300 million.

CPF Building is 46 storeys high and has two basement levels. It may be redeveloped to tap a maximum GFA of 606,000 sq ft, an increase of over 24 per cent from its current GFA.

The building has 276 car parking lots. It is on a site with a 99-year leasehold tenure starting January 1968. The building was completed in the mid-1970s.

The CPF Board has taken a long lease at Novena Square. From Monday (Nov 23), it will relocate its corporate operations to Novena Square Towers A and B. The move does not affect the CPF Service Centre at 79 Robinson Road which will continue to operate on the second floor of CPF Building till further notice.