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SLA fact sheet: Take-up of office space since February 2007
A) 104,000 sqm dedicated office space taken up
SLA’s adaptive reuse of government buildings has helped to alleviate the tight office supply by releasing about 104,000 square metres (sqm) (out of the total Gross Floor Area (GFA) of 122,000 sqm) for dedicated office use in 2007.
Since February 2007, SLA started tendering out 15 former schools, vacant community centres, childcare centre and institutional buildings for office use only. To-date, 12 properties were awarded. Of these, 7 were former schools, 3 were former Government buildings, a former community centre and a former childcare centre.
These properties were located on either the CBD fringes or within housing estates near MRT stations, public transport facilities and amenities. The smallest GFA was 169 Sims Avenue (385 sqm) and the largest being the former ITE Pasir Panjang at Alexandra Road (25,335 sqm).
The tendered monthly rent ranged from $4 per sqm (psm) to $35.40 psm, depending on the location, size, condition of the property, accessibility, amenities, and other comparatives.
SLA’s master office tenants range from companies in the property leasing and
management sectors to the financial sector. 2 of them are publicly-listed
companies; Equation Corp Limited and Vita Holdings Limited.
Key properties awarded include:
a) Former Gan Eng Seng School at Raeburn Road
b) Former CPIB Building at 150 Cantonment Road (4,533 sqm)
c) Former ITE Pasir Panjang at Alexandra Road (25,335 sqm)
d) Former River Valley Primary at River Valley Road (4,390 sqm)
e) Former police headquarters at 195 Pearl’s Hill Terrace (14,331 sqm)
More than half of the above properties are fully leased. This means that in the first quarter of 2008 onwards, there is a ready supply of office space totalling at least some 73,400 square metres of GFA.
B) 104,000 sqm dedicated office space taken up
According to regular property leasing firms like Jones Lang Salle, Knight Frank and CBRE, there has been significant interest in the sub-leasing market for vacant units from SLA’s master tenants at these key properties. While those located at the CBD fringe are already fully leased, the former ITE Pasir Panjang at Alexandra Road, and the former Gan Eng Seng at Raeburn Park, are understood to be over 60% sub-leased.
According to market sources, Foster Wheeler, a major US based MNC, has
committed to almost 70,000 sf at ITE Pasir Panjang. This will decant about
4,650 sqm of office space in the CBD (Source: Donald Han, MD of Cushman &
Hean Nerng Investments Pte Ltd, a subsidiary of the LHN Group Pte Ltd won the tender for another large property at the former Gan Eng Seng Secondary School at 10 Raeburn Park. This property according to Kelvin Lim, the company’s spokesperson, is already about 60% sub-leased to advertising firms and a NGO. The Group’s other subsidiary, Hean Nerng Warehousing Pte Ltd also tenanted the former CID office at 18 Pearl’s Hill Terrace. This site is already 100% sub-leased to companies for their back-of-house operations. They include interior design firms and consultancy firms.
SLA awarded the former Moulmein CC at Shan Road to Phillip Securities Pte Ltd. They will be using the property to operate as an office to house their sales force and support functions, with a customer service area for clients to access their services. They are also setting up an Investor Centre to providing financial services, a cafeteria, seminar meeting rooms and backend operations.
C) Reasons for renting State properties as office use
The most popular properties tendered out last year were former schools. Master tenants had considered factors such as cost-effective rentals, good location, high visibility, architectural charm and the adaptable fit, according to their office operations. Former schools enjoy the appeal of convenient locations and ease of conversion with lower retrofitting costs. More importantly, they met the immediate needs of tenants decanting from prime locations. Entrepreneurial start-ups and small office outfits can move in relatively quickly while MNCs can relocate their back-of-house operations to enjoy lower rentals.
Another reason for the popularity of State properties for office use is they usually have large land area surrounded by lush greenery. Former school sites have playfield or courts for sports and recreational activities for their office tenants to enjoy. For example, one of the earliest office sites awarded in early 2007, was the former River Valley Primary tenanted to ERC Holdings Pte Ltd. The property has been turned into a boutique business complex complete with gymnasium, outdoor recreation, F&B outlets and meeting rooms. ERC Holdings Pte Ltd which has also relocated to the new site, had freed up over 1,860 sqm of space in the CBD area themselves. They had also sub-tenanted office space to a luxury watchmaker which will be using it to operate its servicing centre.
D) SLA’s strategy of asset management
In the past year, SLA has unlocked the potential of these properties for mixed uses including office use, to respond to the urgent needs of the various business sectors. SLA adopted the strategy of asset management for vacant State properties that have strong potential for value creation and meet the market demand in certain growing sectors, such as commercial, office, and other uses. For instance, a proactive and upstream approach was adopted by working with other planning agencies to determine the appropriate use for the vacant state properties.
E) Upcoming properties (total GFA: 3,000 sqm)
Upcoming properties to be launched for tender with office as one of the uses, in 1Q2008:
1. Former CAAS Office
2. Former Siglap-Changi CC
Total GFA is about 3,000 sqm.
F) Resource references
1. For the availability of vacant State properties and upcoming tenders,
please visit https://app1.sla.gov.sg/spio
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