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At the stratgic junction of Cecil Street and
Church Street this location befits from a network of roads directly linked
to Raffles Place MRT via an under pass
ESSENTIALS
| Street
Address |
30 Cecil Street |
| Postal
Code |
049712 |
| TECHNICAL |
| Floors (over
ground) |
30 |
| Year (end) |
1998 |
| Column Free
Space |
up to 250,000 sq ft |
|
6 floors of Prudential Tower being sold
K-Reit said to be buying space at
about $1,550 psf of net lettable area
In a deal that could help benchmark
office values in the Raffles Place area and smooth the way for more office
investment transactions, a property fund is said to be selling six floors at
Prudential Tower for about $1,550 per square foot or about slightly over
$100 million.
The buyer in the deal being stitched
together is believed to be listed K-Reit Asia, which already owns 44.4 per
cent of the strata area in the 30-storey building at the corner of Church
and Cecil streets.
Prudential Tower is on a site with a
remaining lease of about 85 years. Jones Lang LaSalle is said to be
brokering the latest sale involving net lettable area (NLA) of about 67,000
sq ft.
As at the end of last year, K-Reit's
existing space at Prudential Tower was valued at $224 million, or $2,066 psf
based on 108,436 sq ft NLA.
So the price of $1,550 psf that K-Reit
is expected to pay for its latest acquisition of six floors is about 25 per
cent lower than the end-2008 valuation on its existing space.
Some market watchers described the
latest pricing as 'not unreasonable'.
'They seem to be slapping themselves by
buying additional floors in Prudential Tower that could affect the valuation
of their existing space in the building. But one could argue that the
end-2008 valuation was too high in the first place,' one property consultant
said.
In any case, an industry observer points
out that K-Reit could still use a higher valuation than $1,550 psf for
Prudential Tower when it revalues its assets at end-2009.
It also made sense for K-Reit to raise
its stake in Prudential Tower and gain control of the building as that could
create other strategic options for the Reit.
The latest deal involves the 20th to
25th levels. The seller is Asia Property Fund, sponsored by LaSalle
Investment Management and PruPIM. The fund bought the six floors in 2007 for
$141 million or just under $2,100 psf from Prudential Assurance Company
Singapore. The latter received units in the fund in exchange for selling the
floors. Prudential Assurance Co Singapore and PruPIM are part of the
Prudential UK Group.
Prudential Assurance Co Singapore still
owns the 30th floor of the building, sources say. It had purchased the seven
floors in the development in early 1996 for $183 million from Straits
Steamship Land, now known as Keppel Land.
That transaction worked out to $2,200
psf. Although this figure was based on floor space and not NLA, property
consultants say the dollar psf price on NLA at which KepLand sold the space
in 1996 would be higher than what K-Reit (a KepLand unit) is paying in the
latest deal.
In short, KepLand group is buying back
the space at a lower price than what it sold it for 13 years ago.
Following its sale of the seven floors
to Prudential Assurance, KepLand also sold further space in the building to
other parties before divesting its remaining 44.4 per cent stake in
Prudential Tower to K-Reit, which was created from a de-merger from KepLand
and listed in 2006. - 2009
September 1 BUSINESS
TIMES
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