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More than 20 percent of space owned by Ngee Ann Development (NAD) in Ngee Ann City’s office towers on Orchard Road is said to be vacant.
NAD owns around 70 percent of total space at Ngee Ann City, occupying all of the office space in Ngee Ann City’s Tower A and some floors in Tower B.
This vacancy rate does not include one-and-three-quarter floors in Tower B leased to Autodesk Asia, which has moved to Fusionopolis but still has a running lease until early-2011. If this space would be included, nearly 30 percent of space owned by NAD in Ngee Ann City could be regarded as physically vacant.
On the contrary, within the same complex, the 140,188-sq-ft of space in Tower B owned by Starhill Global Reit has a lower vacancy figure at 4.4 percent as of end-June.
The property manager of the Reit is believed to be signing office leases at less than $9 psf on average, while NAD’s office space is said to be transacting at an average of $9 psf.
Industry observers said the high vacancy rates for the offices owned by NAD are due to the company expecting slightly-above-market transacted rents and being more selective on tenants, as well as the landlord being less pro-active in offering its available space for listing with agents.
NAD also owns the 20-storey freehold building 268 Orchard Road, which has also been vacant for the past few years. Currently, the company could redevelop the 38-year-old building, with sources suggesting that works to demolish the property could begin in October.
In January 2010, NAD’s wholly-owned subsidiary RE Properties, received permission to redevelop the site into a 12-storey commercial building with a basement level. The planned development scheme will yield a total gross floor area of approximately 183,361 sq ft.
The new building, which will comprise upmarket restaurants and shops, is expected to be ready in 2013, according to The Business Times.