AEW

Retail podium, three office floors at 30 Raffles Place on the market

A S$110 million revamp of the former Chevron House (centre) will result in a 40 per cent increase in its net lettable area.

A four-level retail podium and the three lowest office floors designated for a banking hall in a revamp of the former Chevron House have been put up for sale through an expression of interest exercise.

The 32-storey property at 30 Raffles Place is being spruced up at a cost of about S$110 million, The Business Times understands.

Among other changes, part of basement 2 is being converted from carpark space to retail. The remainder of basement 2 along with basement 3 will continue to house car park lots.

Word on the street is that the indicative combined pricing for the retail podium and banking hall space is S$480 million.

The price split is roughly S$300 million for the retail space (about S$5,800 psf on net lettable area or NLA); and S$180 million (almost S$3,100 psf) for the proposed banking hall in the office podium, which occupies levels 3, 4 and 5.

Bidders may make offers for either the retail space or the office space, or both.

Located next to Raffles Place MRT Station, 30 Raffles Place is on a site with 99-year leasehold tenure starting December 1989. This leaves a balance term of about 69.5 years.

Divestment of the retail space and the banking hall space is one of the conditions for the final completion of Oxley Holdings' sale of the 32-storey building to a unit of US-based property fund manager AEW for a total of up to S$1.025 billion under a sale and purchase agreement inked in late-April this year.

Oxley has said that it intends to divest the retail space and the banking units (on levels 3 to 5) as soon as practicable, factoring market conditions, and in any event, before the final completion of the proposed sale to AEW, which is expected to take place by the end of first-quarter 2020.

Oxley is also aiming to complete the ongoing major refurbishment of the building, which began on March 1 this year, no later than Q1 2020.

The first completion under the sale and purchase agreement with AEW took place on June 7, resulting in 82.35 per cent of the issued and paid-up capital of Oxley Beryl, which holds 30 Raffles Place, being transferred to buyer AEW's vehicle Golden Compass (BVI).

BT understands that the expression of interest, being conducted quietly by property consulting groups Cushman & Wakefield and JLL, is slated to close towards the end of this month.

The retail podium - on levels 1, 2, basement 1 and part of basement 2 - comprises 79 units. The retail podium's NLA is about 51,400 sq ft and its strata area, 61,500 sq ft.

Tenants have been secured for some of the units, including a health/fitness operator for basement 2. Upon completion of the refurbishment, the retail podium will be rebranded as Change Alley Mall.

An investor stands to derive not only rental payment from tenants but income from additional sources such as event space and a media screen.

As for the office podium (levels 3 to 5), its NLA and and strata area are the same: nearly 58,300 sq ft.

Above the office podium is the office tower (with 27 levels). A lease is close to being stitched, with coworking operator WeWork to take nine floors in the tower, BT understands.

Following the refurbishment, the building's total NLA will expand by about 40 per cent from 261,300 sq ft to 363,000 sq ft.

Source: Business Times, 12 July 2019