http://www.businesstimes.com.sg/real...ding-for-s550m

Ascendas clinches CPF Building for S$550m

It plans to redevelop site into new office project with supporting retail; PCRD & Lippo-SingHaiyi consortium were the other 2 bidders

By Kalpana Rashiwala

[email protected]

@KalpanaBT

Nov 27, 2015


ASCENDAS, which won the tender for the CPF Building at 79 Robinson Road, with its top bid of S$550 million, plans to redevelop the property into a Grade A CBD office project with supporting retail elements, the company said.

The tender, which closed on Oct 28, drew three bids. The results were announced by the Central Provident Fund Board on Thursday.

The win marks Ascendas' maiden Singapore office acquisition.

Manohar Khiatani, president & group CEO of Ascendas and deputy group CEO of Ascendas-Singbridge, said: "This latest acquisition builds on our regional office portfolio, which already includes assets in Shanghai (Ascendas Plaza) and Seoul (Citibank Centre, Anam Tower, Signature Towers Seoul and West Finance Centre). Upon redevelopment of the CPF Building, Ascendas would be able to offer quality CBD office space to complement our business park offerings to our customers in Singapore."

Ascendas is understood to be exploring plans to list an office real estate investment trust.

CPF Board said it awarded the tender for CPF Building's sale to Southernwood Property, a fully-owned unit of Southernwood Holding, which in turn is a a fully-owned unit of Ascendas Land (Singapore). The winning bid translates to a unit land price of S$1,032 per square foot per plot ratio (psf ppr) inclusive of an estimated differential premium of S$75.5 million payable to the state to utilise the maximum gross floor area (GFA) of 606,088 sq ft allowed for the site. This is 24 per cent more than CPF Building's existing GFA of 487,400 sq ft. CPF Building has a remaining site lease of 51 years.

Hong Kong tycoon Richard Li-controlled Pacific Century Regional Developments' fully-owned unit Leapford was the second highest bidder at S$538.28 million.

The third and lowest bid, of S$280 million, came from OUE Reef Development, the ultimate shareholders of which are OUE, Haiyi Holdings and SingHaiyi Group.

CPF Board said in its statement that top bidder Southernwood Property also met all tender criteria, including the strength of bidders' financial standing and purchase conditions such as the assignment of tenancies to the new owner.

CPF Building is 46 storeys high and has two basement levels. Its net lettable area is about 324,000 sq ft. It is on a site with a 99-year leasehold tenure starting January 1968. The building was completed in the mid-1970s.

When the tender for the property was launched a couple of months ago, market watchers were expecting the property to fetch S$450 million, or S$867 psf ppr.

CBRE, the sole marketing agent for the CPF Building, 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 .

Galven Tan, director, investment properties, at CBRE, said: "We received a lot of interest from both local and foreign parties who evaluated the opportunity in great detail albeit (there were) only three tender submissions. The property's strong attributes was key and the timing was good for a potential rebound in office rents in the medium term, if the buyer decides to undertake redevelopment works. The result is also testament that developers continue to be keen on well-located opportunities with the flexibility of multiple development options."

Subject to the approval from planning authorities, CPF Building's new owner could undertake additions and alterations or redevelop the property into a mixed-use project comprising offices, retail, serviced apartments and/or possibly hotel, he added.

Since Monday, CPF Board has been relocating its corporate operations in phases to Novena Square, where it has taken a long lease.

Given this phased migration, CPF Board will deliver vacant possession of the approximately 70 per cent of the Robinson Road building that it currently occupies, to the new owner around Q1 2017.