Automobile association pays $43m for East Coast building

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Price translates to 4.5% gross yield; purchase said to be for investment

[SINGAPORE] The Automobile Association of Singapore (AAS) is buying a five-storey commercial building at the corner of East Coast Road and Chapel Close for $43 million.

The association is understood to be buying the freehold building, named Tides, as an investment property. The building is fully leased with food and beverage (F&B) outlets on Level 1, shops on Level 2 and offices on the third to fifth levels.

Located in District 15, Tides is in an established lifestyle and F&B enclave. The top two levels of the blue building are set back from the East Coast Road frontage of the property by a roof terrace above the third level. The net lettable area is 22,927 sq ft. Tides has 18 basement car-park lots.

Tenants include Italian restaurant Spizza, Artists Academy, I.Poise Jewels and an interior design firm.

The $43 million acquisition price is thought to reflect a 4.5 per cent gross yield based on the current rental income being generated by the property.

Tides underwent a major spruce-up that was completed in 2012. It does not have immediate redevelopment potential. Its current gross floor area is thought to be around 25,900 sq ft, which exceeds the maximum 22,071 sq ft allowed, based on the 3.0 plot ratio for the site under Master Plan 2008. The 7,357-sq-ft site is zoned for commercial use.

The property is being sold by a private investor.

AAS' acquisition of the property was approved by the association's members at their annual general meeting earlier this week and the option said to be granted to it yesterday. DTZ is understood to have brokered the sale by private treaty.

Last November, the association vacated its long-time headquarters at AA Centre along River Valley Road and relocated to GB Point in Kallang Bahru.

This followed the association's sale of its 55,574-sq-ft space on the first six levels of the 14-storey freehold River Valley Road building for $61.8 million to Far East Organization.

Source: Business Times, 30 May 2014