CBRE to market sale of CPF Building

20150509-bt-cbre-market-sale-cpf-building-robinson-pic 79 Robinson Road to be put on market either through a tender or an expression-of-interest exercise in Q3

THE Central Provident Fund (CPF) Board has appointed property consulting group CBRE to market the sale of the CPF Building at 79 Robinson Road.

The tender for a marketing agent closed on Feb 26 this year, attracting seven bids; CBRE's bid was the third-lowest.

The main criteria applied in the selection of the agent were price competitiveness of the fees quoted, the track record of the firm and its proposed sale strategy for marketing the building.

The tender was awarded on April 23.

When contacted, a spokeswoman for the CPF Board said the building will be put on the market either through tender or an expression-of-interest (EOI) exercise to be called in the third quarter of this year.

"We target to sell the building, which has a remaining lease of 52 years, by the end of the year," she said, adding that CPF's service centre at 79 Robinson Road will continue to operate till further notice.

The offices of the CPF Board will move to Novena Square from the fourth quarter; The Business Times understands that it has taken a long lease on 260,000 sq ft of space there.

The 38-year-old CPF building, at 46 stories high, has a net lettable area (NLA) of around 325,000 sq ft and is expected to fetch more than S$450 million.

The property has significant redevelopment potential. It has a land area of about 47,055 sq ft.

Under the Master Plan 2014 of the Urban Redevelopment Authority (URA), the site is zoned for commercial use with a maximum 50-storey height; the maximum plot ratio is 12.88, inclusive of bonus plot ratio for the site's size and its proximity to Tanjong Pagar MRT station, which means a new project which comes up there can have a gross floor area (GFA) of up to 606,068 sq ft.

A new development will be more efficient, extracting a higher ratio of NLA to GFA.

Market watchers have suggested that before the tender or EOI for the building is launched, a key step to be taken is the verification of the building's existing GFA; this would enable an accurate calculation to be made of the differential premium payable by the successful bidder to the state for tapping the unutilised GFA.

Market watchers have also guessed that it would make sense to engage the URA to make an assessment of the type of new development that would be in sync with the authority's planning intention for the area. They also suggested that the Singapore Land Authority be engaged to explore the possibility of a top-up of the site's lease.

Potential buyers would need to consider these factors when formulating their bid price for the property.

Source: Business Times, 9 May 2015