[SINGAPORE] The Ministry of National Development (MND) is holding off its move to Jurong East for now, but its statutory boards, the Agri-Food & Veterinary Authority of Singapore (AVA) and the Building and Construction Authority (BCA), will proceed as planned to relocate next year to the office tower of the Jem project.
The 12 levels of office space, with net lettable area (NLA) of around 310,000 sq ft, is expected to receive Temporary Occupation Permit by year's end.
All three entities are currently housed in the MND Building in Maxwell Road.
"As there are no immediate plans to re-develop the existing MND Complex at Maxwell, MND's plans to re-locate to Jem will be organised in phases. In the first phase, AVA and BCA will relocate to Jem in 2014," said an MND spokesman.
"MND HQ would move in due course, taking into account the market conditions and the pace of developments to relocate other ministries to Jurong Lake District. This will create eventually a strategic cluster of associated ministries at Jurong Lake District."
In 2010, the government said that, besides MND, AVA and BCA, there were also plans for the Ministry of the Environment and Water Resources to move to Jurong East.
The following year, MND revealed that it had inked a 30-year lease for the office tower of Lend Lease's mixed development next to the Jurong East MRT Station, where it, along with BCA and AVA, would move to.
Now, the ministry is seeking to appoint a panel of leasing agents to sublet around 70,000 sq ft comprising three of the 12 levels of office space in Jem, BT understands. The asking monthly rent is said to be around $6.50 per square foot (psf).
MND's spokesman said: "The Jurong Lake District is one of the key regional growth areas identified by the Singapore government. To help catalyse the development of this new growth region, MND signed a 30-year lease at Jem with the developer, Lend Lease, in 2011. MND also worked to help Lend Lease to design an award-winning green office building.
"Flexibility was provided for in the lease arrangement so that MND can better manage the stages and timing of its use of the office spaces. This included sub-leasing to other interested tenants."
Following AVA and BCA's move to Jurong, the vacated space at Maxwell Road will be made available to interested tenants for their short-term lease.
Jem's retail component opened in June this year. The buzz quotient around Jurong East MRT Station is set to increase next month, when CapitaLand group opens the mall at its Westgate project. Located next to Jem, Westgate also has an office tower, which is slated for completion late next year.
Talk in the market is that leasing efforts for the 20-storey Westgate Tower, comprising 320,000 sq ft net lettable area of offices, have been put on hold.
CapitaLand is said to have initially planned to find a bulk buyer for an enbloc sale of a huge chunk, if not all, of the office space at a target price of around $2,200 psf. However, it is now open to selling strata units, probably on a whole-floor basis, suggest sources. "A price of $2,200 psf is more likely to be achieved on a strata basis rather than for en-bloc basis," said a seasoned investment sales agent.
In the past six months, office units at Paya Lebar Square were sold at prices ranging from $1,732 psf (for a 484-sq ft space on the eighth floor) to $2,427 psf (for a 506 sq ft unit on the 13th floor), based on caveats data. "Paya Lebar is closer to the city, compared with Jurong East. But Jurong East is much more advanced in terms of shaping up as a regional centre than Paya Lebar," said the agent.
Last month, 10,097 sq ft on the 41st level of Suntec Tower Three was transacted at $3,000 psf. The building is on a site with balance lease term of about 75 years.
"Those who buy office units in the Jurong East location may be in businesses that don't require them to travel in and out of the city. For instance, an office in Jurong East may be complementary to their industrial activity in the western part of Singapore," said the agent.
From an investment angle, buying a strata office in Jurong East may also appeal to those who want to invest in the Jurong regional centre story without being affected by the cooling measures that have been slapped on the residential and industrial property sectors, say market watchers.
Another source of office supply in the Jurong East locale will emanate from Sim Lian's project on Venture Avenue. In September, Sim Lian bagged the Urban Redevelopment Authority's provisional permission to develop about 625,500 sq ft gross floor area of offices and 69,500 sq ft of retail space on its site. Word on the street is that Sim Lian is looking to strata-title the office component for sale, with a launch expected in the first half next year.
Source: Business Times, 11 Nov 2013