(SINGAPORE) YI Kai Group and Fission Group, the duo that recently paid $71 million for VTB Building in Robinson Road, are said to have joined forces to buy Aviva Building in Cecil Street and next-door Cecil House from insurer Aviva for a total of $101 million. Aviva is understood to be selling the assets that it considers 'non-core'.
Market watchers reckon Fission and Yi Kai hope to redevelop all three CBD office blocks they have snapped up lately into residential projects - subject to official approval.
The three sites are zoned for commercial use with an 11.2-plus plot ratio and 35-storey maximum height, according to the Urban Redevelopment Authority's Master Plan (MP) 2008.
In October last year, URA lifted its ban on converting office blocks in the Central Area to other uses.
Aviva and VTB buildings are freehold. Cecil House is on a site with a remaining lease of 71 years.
Analysts suggest that Yi Kai and Fission's plans to redevelop the Cecil House plot into apartments will be subject to getting a lease top-up to 99 years from the state. 'Otherwise, they may redevelop the property to a new office block,' a market watcher suggested.
BT understands the freehold Aviva Building is being sold for about $65 million, which translates to roughly $960 per sq ft of existing net lettable area (NLA).
Based on the site's 11.2-plus plot ratio under MP 2008, the unit land price works out to about $590 psf of potential gross floor area (GFA), excluding any development charge (DC) that may be payable.
Cecil House was priced at $36 million or about $710 psf of NLA in the sale to Yi Kai and Fission.
It is believed there is untapped potential to develop a further 20,000 sq ft GFA each for the Cecil House and Aviva Building plots.
The earlier sale of VTB Building for $71 million worked out to $1,061 psf of NLA and a unit land price of about $700 psf per plot ratio - based on an 11.2 plot ratio and assuming no DC is payable.
Jones Lang LaSalle's director of investment sales Stella Hoh is understood to have brokered the sale of Aviva Building and Cecil House. JLL is also the marketing agent for two office floors at Parkway Parade that Aviva is looking to sell.
BT understands both buildings are currently almost 100 per cent occupied. Aviva uses about 60 per cent of Aviva Building.
Source: Business Times, 3 Jul 2009