The former Ministry of Home Affairs (MHA) Complex at Tanglin Road, which is also known as Phoenix Park, has been placed for tender.
According to the Singapore Land Authority (SLA), the prime site on the fringe of the Orchard Road belt will be open for adaptive re-use as office space.
Analysts said they are expecting to see strong interest due to the current office space crunch.
Winston Cheah, Senior Management, Project Services, SLA, said: “At the moment, there is an office space crunch. We are contributing by providing more office space. We hope the successful bidder can make this into an office icon.”
Phoenix Park has a land area of just under 57,000 square metres and a gross floor area of about 13,000 square metres. The tenancy is for an initial three years and renewable on terms up to 2017.
What makes the site stand out is its 31 individual blocks.
Danny Wong, Marketing Manager, Hean Nerng Holdings, said: “The potential is very good here. There are a lot of blocks. Companies are better off leasing one block to themselves, (compared to leasing) a commercial development where they have to share different floors. Over here, they can have their own space and their own entrance. This is good for companies who want a strong corporate image.”
And the sprawling landscape means more car park space will be available, compared to the financial district.
The current indicative rent of S$165,000 a month is also seen as tempting, despite the retrofitting work required.
Donald Han, Managing Director, Cushman & Wakefield (Singapore), said: “The current price as a guide price translates into about S$1.15 psf. If you’re looking at refurbishing this entire portfolio at a cost of about S$50 – S$70 psf, it (will) breakeven at about S$2.50 to S$3.00 psf. In this area, you can look at leasing anything from about S$4.00 to S$5.50.”
Cushman & Wakefield said bidders may pay up to S$4.00 psf.
“If you look at other transitional sites at Scotts Road near the MRT, the breakeven point is about S$5.00 psf. We lease that at about S$7.00 to S$8.00 psf. So where Phoenix Park is, with no easy access to MRT, we’re at S$5.00, not beyond S$6.00,” said Mr Han.
Likely tenants include those who may not require a city centre location, but would like to remain accessible to the financial district such as advertising agencies.
The tender closes on June 4.
Since February last year, SLA had tendered out 20 former schools, vacant community centres, childcare centres and institutional buildings for office use only. – CNA/so
Source : Channel NewsAsia – 13 May 2008