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Ascendas-Singbridge in S$1b venture to redevelop former CPF Building

SINGAPORE — The Republic’s urban solutions giant Ascendas-Singbridge Group said yesterday it has entered into a joint venture with Japanese firms Mitsui and Tokyo Tatemono to redevelop the former CPF Building at 79 Robinson Road into a Grade A office building with retail amenities.

SINGAPORE — The Republic’s urban solutions giant Ascendas-Singbridge Group said yesterday it has entered into a joint venture with Japanese firms Mitsui and Tokyo Tatemono to redevelop the former CPF Building at 79 Robinson Road into a Grade A office building with retail amenities.

The total development cost for the project is estimated at S$1 billion, Ascendas-Singbridge said. The existing building will be decommissioned and development works will commence in the second quarter of next year. Construction is expected to be completed by 2020.

Analysts TODAY spoke to said that although the office market remains in a downward correction, the situation is likely to improve in about four years, when the redeveloped CPF building enters the market.

“At this point in time, the office market is definitely under pressure; it’s not possible to pinpoint any drivers of demand. The market is cautious and worried about supply that is coming from the three big buildings Guoco Tower, Marina One and DUO Tower,” said Mr Desmond Sim, head of CBRE research in Singapore and South-east Asia. “However, there has not been much supply being identified after the completion of these projects. They might benefit from the famine, or supply crunch.”

“The current Grade A office market remains in correction. The overall Grade A CBD (Central Business District) rent moderated by 2.5 per cent to S$8.64 per square foot per month in the third quarter, marking the sixth consecutive quarter of decline,” said Ms Christine Li, director of research at Cushman & Wakefield.

“In recent times, there has been a structural shift in the office leasing market due to reduced demand from banks, the largest occupier of prime CBD space. A growing number of banks are downsizing and reducing their office spaces in the CBD and moving more back-end staff to business parks. Replacement demand from tech companies also did not materialise as expected … In the short-term, leasing activity is expected to remain fairly muted due to cautious business sentiment amid continued weak macro-economic conditions,” she added.

However, by 2020, some of those pressures may ease. Ms Li expects rents at the redeveloped project to come in at about S$8.50 to S$9 psf as the current supply glut dissipates.

The 47,050sqf 79 Robinson Road site has a potential gross floor area of about 617,850sqf. The new development will feature over 500,000sqf of prime Grade A office space, Ascendas-Singbridge said, and have modern work spaces to cater to clients in information technology; communications and media; banking, finance and insurance; as well as professional and business services.

Ascendas-Singbridge and the consortium of Mitsui and Tokyo Tatemono will hold 65 per cent and 35 per cent stakes respectively in the joint venture company — Southernwood Property. Under the partnership, Ascendas-Singbridge and the Mitsui — Tatemono JV will own, develop and manage the project.

“Leveraging the strength and network of the combined entity, we look forward to creating an iconic landmark in the prime CBD location,” said Mr Miguel Ko, group CEO of Ascendas-Singbridge, which had won the tender for the sale of the building by the Central Provident Fund Board in November 2015 with a bid of S$550 million.

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