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Deka Singapore’s 32-storey prime commercial building in Raffles Place has been put up for sale via an expression of interest (EOI), with CBRE and JLL as joint marketing agents.
Completed in 1993, Chevron House features a five-storey retail podium and a 27-storey office tower. It also has 96 carpark lots within its two-storey basements, while enjoying direct access to Raffles Place MRT station.
The 29,891 sq ft site has 71 years remaining on its 99-year tenure, which started from 7 December 1989. With an overall occupancy rate of 98 percent, the retail podium and office tower have a NLA of around 45,613 sq ft and 215,667 sq ft, respectively.
RSP Architects has been engaged by Deka Singapore to evaluate Chevron House’s Asset Enhancement Initiatives (AEI) potential.
In a release, CBRE and JLL revealed that the property has an unutilized GFA of around 14,950 sq ft, “which subject to the relevant approvals should be accommodated in the retail podium”. They added that the additional GFA will not entail any development charge.
“Sentiment towards the office investment market has improved significantly in the last six to nine months and there are now more buyers than sellers. The fear around the “office oversupply” situation has evaporated and most investors are expecting rental growth to return in 2018 and beyond,” said CBRE executive director capital markets Jeremy Lake.
“We expect to achieve in excess of S$700 million which is very realistic and reflects a blended price of S$2,700 psf on the total NLA of approx. 261,280 sq ft. The net yield at S$700 million is estimated to be in the region of 3.6 percent in the first year.”
Meanwhile, Anthony Barr, regional director of capital markets at JLL Singapore, expects Chevron House to appeal to “Singapore and foreign-based investors including property funds, corporates and family offices/UHNW’s”.
“Chevron House is a well-recognized landmark asset that has consistently outperformed the broader market in terms of rental growth and occupancy. It has a strong track record and further upside potential as various asset enhancement initiatives will drive strong investor interest,” he said.
The EOI exercise for the property will close on 14 September.
This article was edited by Denise Djong.
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