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Old September 15th, 2006, 02:38 PM   #1
Charging Bull
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V on Shenton (UIC Building Redevelopment) | U/C

(SINGAPORE) UIC Building may be the latest ageing office block in the Central Business District (CBD) that could be headed for redevelopment.


From landmarks to history? UIC is exploring en bloc sale for its namesake building (above), while Straits Trading is expected to tear down its landmark Battery Rd property (next)
Together with a string of other redevelopment candidates - including 1 Shenton Way, Natwest Centre, 71 Robinson Road (the former Crosby House), Asia Chambers, Straits Trading Building and Ocean Building - the total net lettable office stock that could be taken out of the market over the next few years could reach around 1.5 million square feet.

That's estimated to be about 7 to 8 per cent of the current available stock in the Raffles Place, Shenton Way and Tanjong Pagar stretch.

This will exacerbate the tightening office supply in the CBD while these buildings undergo redevelopment, setting the base for further increases in occupancy rates and rents over the next two to three years, argue some office investors.

New office supply this year is estimated at 1.6 million sq ft, mostly from the completion of One Raffles Quay. However, the figure will fall to just 80,000 sq ft next year, then go to 544,000 sq ft in 2008 and 155,600 sq ft in 2009, before increasing back to 1.6 million sq ft in 2010 with the completion of Phase One of the Business & Financial Centre, according to Colliers International.

Occupancy rate in the Raffles Place area has risen from 87.1 per cent to 94.4 per cent over the past two years, according to Colliers.

In the Shenton Way/Tanjong Pagar location, the occupancy rate has increased from 86.6 per cent to 92.5 per cent.

Over the same period, the average gross monthly office rental in Raffles Place has increased 67 per cent to $6.92 per sq ft (psf) currently.

For the Shenton Way/Tanjong Pagar area, the increase has been of the order of 55 per cent, to $5.63 psf.

While some office industry players argue that office occupancy rates and rents will head further north because of contraction of supply as the likes of One Shenton Way, Straits Trading Building, Ocean Building and possibly UIC Building are pulled down for redevelopment, Colliers International director (commercial) Calvin Yeo says the impact may be mitigated by the fact that the redevelopment may be phased over a few years. 'So not all these buildings will be pulled down at the same time. And at least some of them, like Straits Trading Building and most likely Ocean Building will be redeveloped into new offices, so they will contribute to future office supply after a few years,' Mr Yeo says.

Mainboard-listed Straits Trading is expected to tear down its namesake office building at Battery Road next month and build a new 25-storey office tower on the site.

Keppel Land is also reportedly planning to tear down the 32-year-old Ocean Building, possibly as early as next year, for redevelopment into a new office block.

United Industrial Corporation, which has been buying up strata units at its UIC Building at Shenton Way, now owns 78 per cent of share values in the leasehold property and is said to be mulling over a collective sale.

Some prospective tenants have been told they can lease space in UIC Building only until June 2008 with no options for renewal.

In order to carry out an en bloc sale, UIC will have to join forces with minority owners of the building controlling additional share values of at least 2 per cent in order to secure the minimum 80 per cent needed for a collective sale.

Owners of the other units are said to include Air India, Airtrust (S) Pte Ltd, Shankar's Emporium group, Comcraft Asia Pacific and property group Lee Tat.

Industry observers say that Asia Chambers, with about 64,000 sq ft of net lettable area, is also issuing new leases for only a year. Its owners have secured approval from the Urban Redevelopment Authority to redevelop the property into apartments with commercial use at street level - similar to approvals given for the respective redevelopment schemes for 1 Shenton Way, NatWest Centre and 71 Robinson Road.
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Old September 15th, 2006, 02:44 PM   #2
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Commercial properties look to be next wave of collective sales

By UMA SHANKARI
AND KALPANA RASHIWALA

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(SINGAPORE) The next wave of collective sales could well come from commercial properties - strata-titled office buildings and shopping centres.


BT understands that three office buildings in the Central Business District (CBD) could be headed for the en bloc route - UIC Building along Shenton Way, a smaller building on Cecil Street and Satnam House on High Street.

And the ageing Upper Serangoon Shopping Centre, on Upper Serangoon Road, could also be put on the market soon, according to property consultancy Credo Real Estate which is marketing the project.

Mainboard-listed United Industrial Corporation has been buying up strata units in the leasehold UIC Building over the past two years and is now said to own about 78 per cent of share values in the property.

BT understands that property company UIC is exploring the possibility of carrying out a collective sale of the building, although no decision has been made.

Sources say that potential tenants looking for space at UIC Building have been told that leases can only be signed up to June 2008, which is when vacant possession has to be given to the building for a sale.





The 72,958 sq ft leasehold site is zoned for commercial use and can be redeveloped into a new 50-storey project with nearly 900,000 sq ft gross floor area (or 12.32 times the site area). Sources estimate this could be about 70 per cent more than what the existing 40-storey building offers.

Market watchers suggest that UIC could get approval from the planning authorities for other uses - such as residential or a hotel. The property is on a site which has a remaining lease of about 62 years.

Elsewhere, Upper Serangoon Shopping Centre is also gearing up for a collective sale - and it could become the second mall to do so, after Ming Arcade on Cuscaden Road. The mall has a plot size of 51,000 sq ft, and contains 164 shop units, as well as eight residential units and one office unit.

Sources also told BT that Satnam House and another office building in the CBD are working towards an en-bloc sale.

News that these four commercial sites could soon be courting buyers comes after last month's report that the first collective sale of a shopping centre in the Orchard Road area may be in the offing, as Ming Arcade was said to be close to nearing a deal with owners controlling a requisite 80 per cent of share value for a collective sale.

Ming Arcade's announcement immediately led to speculation that other ageing strata-titled commercial properties in the Orchard Road belt and elsewhere could potentially follow suit.

Now, with the hoped-for launches of the three office buildings in the CBD and Upper Serangoon Shopping Centre, it seems like owners of strata-titled commercial properties are also climbing onboard the en-bloc bandwagon.

Real estate investment trusts (Reits), which are constantly on the lookout for opportunities to grow their portfolios, might form a ready pool of buyers for retail and office properties, market watchers said.

But the number of commercial en-bloc transactions is likely to be much lower than the number of residential collective sales to date, they added.

'In terms of quantity, it will not be anything like residential,' said Jones Lang LaSalle's regional director and head of investments, Lui Seng Fatt. JLL is marketing Ming Arcade.

Launching a commercial site for an en-bloc sale is not as easy as launching a residential site. For starters, unit owners might disagree as to how the money is divided among them.

'The method of apportionment for commercial properties is still untested,' said Mr Lui. For example, when it comes to retail properties, factors such as the floor level, a shop's distance from an escalator and even its distance from the toilets might affect its value.

Also, in every shopping centre, no matter how old, there will be profitable shops whose owners will not want to sell.

'A lot of them (unit owners) operate their own businesses,' said Mr Lui. 'It is their livelihood. They must get a really good offer to entice them - a good en-bloc premium.'
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Old September 22nd, 2006, 08:56 AM   #3
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WAH!!!!!!!!!!!!!!!!!
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Old September 22nd, 2006, 08:58 AM   #4
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UIC is a great landmark and a large building, wonder how big the new project would be.
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Old September 23rd, 2006, 03:48 AM   #5
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UIC takes up a massive plot...enough to build at least 2 more towers
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Old September 23rd, 2006, 06:52 AM   #6
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What's the height restriction over there?
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Old September 23rd, 2006, 12:25 PM   #7
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the article said it can be built to around 50 storeys
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Old December 20th, 2006, 04:22 PM   #8
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Title : UIC Building put up for enbloc sale
By :
Date : 20 December 2006 2203 hrs (SST)
URL : http://www.channelnewsasia.com/stori...248349/1/.html


SINGAPORE: UIC Building has become the largest property in Singapore to be placed for collective sale.

Its owners are asking for at least S$830 million for the office complex along Shenton Way.

That works out to about S$1,150 per square foot per plot ratio.

And analysts say they expect more office properties to be sold enbloc.

The 40-storey UIC Building may now be a commercial building - but its agent says that it could well be turned into posh homes.

Jeremy Lake, Executive Director, Investment Properties, CB Richard Ellis, said, "The feedback so far is probably that people will go down the residential route. That's the expectation. Residential market is very strong in the CBD. With the success of one or two projects over the last few weeks, there's a great degree of confidence with that sector."

Units at the Marina Bay Residences nearby recently sold out within two days for an average of S$,1950 per square foot.

Going by that, analysts say residential projects could fetch some S$300 more per square foot than office developments in today's market.

Analysts say that is why owners of old office buildings are keen to ride the downtown living wave.

They say there are about 10 projects in the central district that match the profile.

And Shenton House, which is in-between UIC and One Shenton Way, is a prime example.

UIC aside, other potential projects include those near Clarke Quay like the Riverwalk Galleria and High Street Centre.

Mr Lake said, "The office market has picked up strongly in the last 12 months, as well as the collective sale market generally. So we're now finding or hearing from owners of strata title commercial properties saying, 'What about us? Can we be sold collectively?' We're thinking that other projects, maybe like Shenton House, or other projects would also be reviewing because the office market is strong or because developers are keen to buy sites. We think that we will see more commercial projects over the next 12 to 18 months."

CBRE says the UIC building can be turned into a 35-storey office building or a 50-storey residential project.

Owners of old buildings in the CBD are expected to keep a close eye on prices of downtown residential projects like Icon, The Lumiere and One Shenton Way, which have been launched or are launching soon. - CNA/ms
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Old December 20th, 2006, 04:34 PM   #9
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Wow, soon the whole stretch will be converted to residential. Will CBD residences still be able to command such premium when the market is flooded with all these apartments?
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Old December 20th, 2006, 06:08 PM   #10
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Quote:
Originally Posted by surfers_ View Post
Wow, soon the whole stretch will be converted to residential. Will CBD residences still be able to command such premium when the market is flooded with all these apartments?
IMO, there is no way UIC can be a viable residential project at that price....Plot ratio allows for 720,000+ sq.ft. of total buildable area, which would translate into 600-700 units....basically the size of another Icon.

Something of that large size will lack "exclusivity" and will not justify the prices of a One Shenton or Lumiere. It is also not particularly convenient to the MRT or any of the immediately upcoming CBD amenities.

So, at this point in time, I don't see any developers willing to take an $830 million bet that they can sell 600-700 units at a breakeven of $1500+psf.....

On the other hand, it would be much easier to see a new office building achieving $7.00 rents (a 5.6% yield on a $1500 land+construction cost), which would even allow for a REIT exit...

My guess is UIC stays as office...
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Old December 21st, 2006, 02:44 AM   #11
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UIC Building up for collective sale

21 Dec 06

Expression of interest launched, with asking price above $830m

THE long-awaited collective sale of UIC Building on Shenton Way has finally been launched through an expression of interest exercise, with an asking price of more than $830 million.



This works out to a unit land price of about $1,150 per square foot of potential gross floor area, inclusive of a total payment of about $204.2 million that the successful bidder will have to make to the State for development charges and to top up the site's lease to the original term of 99 years.

As the building was completed in the early 1970s, the site has a run of about 62 years.

Taking into account construction costs, fees and interest expenses, the all-in development cost could come to about $1.4 billion, say market watchers, which means that this site would appeal mostly to big players.

Mainboard-listed United Industrial Corporation, which owns 78.8 per cent of share values in the property, is expected to bid for the site. The minority owners in the building include Air India, Lee Tat, Comcraft, Korea's Woori Bank and Shankar's Emporium group.

'We are confident of getting approval from owners controlling at least 80 per cent of share values, once we get our price - in excess of $830 million,' says CBRE executive director (investment properties) Jeremy Lake, whose firm is marketing UIC Building.

'This is the largest collective sale in dollar terms ever launched. It is also the first major commercial collective sale,' he adds.

Under Master Plan 2003, the 72,960 sq ft site is zoned for commercial use with an 11.2+ plot ratio and qualifies for a 10 per cent bonus plot ratio. The site has a 35-storey height limit. The maximum potential gross floor area (GFA) of 898,867.2 sq ft is about 70 per cent more than the existing GFA.

Industry observers say that the successful bidder of UIC Building is likely to consider a residential development, given that City Developments has been given approval by the Urban Redevelopment Authority (URA) to redevelop its nearby No 1 Shenton Way site into a residential project. Known as One Shenton, it is slated for launch soon.

This is especially so given last week's strong sellout at the nearby Marina Bay Residences.

'Of course, given that office rentals and values are also appreciating strongly, and the shortage of office space building up on the island, a new office development also makes sense,' said a seasoned market watcher.

CBRE said that any change of use to residential or other uses such as hotel or service apartments is subject to approval from the relevant authorities.

Based on the guide price indicated by CBRE, UIC's owners will receive about $2,000 psf on their respective strata floor area in the building. This is about three times the $650 psf achieved for the last strata sale in the building - a mid-floor unit of 8,934 sq ft sold in October last year.

Meanwhile, another collective sale is also in the works on the same side of the street - at Shenton House, sandwiched between No 1 Shenton Way and UIC Building.

This means that this entire strip in the 'old CBD' is headed for redevelopment and rejuvenation. The owners of Shenton House recently held a 'beauty parade' to pick a marketing agent. The building is said to have more than 170 owners.

BT reported a year ago that URA and the Land Transport Authority (LTA) are looking into a possible future extension of McCallum Street which will involve a minor road being created between the Shenton House and UIC Building development sites, and this will connect the existing CBD to future developments in the Marina Bay area and also provide a pedestrian link.

However, the road extension will only be created in tandem with redevelopment plans for Shenton House and UIC Building. Although it will see the owners of UIC Building and Shenton House giving up part of their respective sites, they will be entitled to include the GFA on the land area to be vested in their redevelopment schemes.

The expression of interest for UIC Building closes on Feb 8.


By KALPANA RASHIWALA
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Old December 21st, 2006, 06:25 AM   #12
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UIC Building is now max at 35 floors. If redeveloped, it would be able to build a tower of sae height? ...or is it 2 towers?
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Old December 21st, 2006, 06:31 AM   #13
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Quote:
Originally Posted by redstone View Post
UIC Building is now max at 35 floors. If redeveloped, it would be able to build a tower of sae height? ...or is it 2 towers?
35/f if office; 50/f if residential I think
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Old December 21st, 2006, 06:37 AM   #14
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35/f if office; 50/f if residential I think
I suppose it would be more viable to build resi?
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Old December 21st, 2006, 06:59 AM   #15
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I suppose it would be more viable to build resi?
not sure (see my earlier post this thread)
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Old December 21st, 2006, 03:13 PM   #16
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Wonder if any developer would try to combine UIC building with Shenton House and develop them into a high end residential building?
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Old December 21st, 2006, 07:13 PM   #17
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I notice UIC's tower facade facing the sea had been painted with a checquered pattern...
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Old December 30th, 2006, 12:44 AM   #18
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UIC Building sale boosts office property sector

29 Dec 06

SINGAPORE: Analysts say the proposed sale of the UIC Building along Shenton Way marks the re-emergence of Singapore's commercial property sector.

UIC Building is the largest property in Singapore so far to be placed for collective sale and it is expected to see strong interest.

Dominating the property buzz of late are home prices in Singapore's central business district.

But analysts say more of such homes will mean less office space.

Over the past three years, rental for top grade office buildings in Singapore jumped from less than $4 per square foot to about $6.50.

Analysts say this jump of some 70% is driven by a mix of rising demand and diminishing supply.

Said Lui Seng Fatt, Regional Director, Head of Investments, Jones Lang LaSalle: "Supply is coming in only in 2008 when the BFC - business financial centre - is ready. But with the conversion of commercial to residential, that will continue to drive the commercial value upwards. The next two years, office building supply will be very tight. So the projection of a mid-$8 (psf rental price) for Robinson Class A building is highly probable. So there's still an upside of about 15 to 20%. That's without taking into consideration the continued conversion of office space into residential."

As many as three office-turned-residential projects - including One Shenton and The Clift - are set to launch soon.

And analysts say, it is likely that developers are looking to turn the Asian Chambers and UIC Building into posh downtown homes as well.

That's because they will see quicker returns.

Analysts say it will take longer for investors to get their money back when it comes to office or commercial developments.

The lease on the UIC Building, for instance, expires in 2008.

Coupled with construction, analysts say, it will likely be 2011 before its owners can rent the property out and see some real cash flow.

But market watchers note that the commercial sector is attracting private equity money.

Lui Seng Fatt said: "In today's market, besides the rental, besides the capital value, we also see a very strong liquidity of international funds, cross-border funds coming into Singapore. Most of the funds are quite well cashed up, they have a very strong financial structure, they're able to hold for a longer time period. So you can see, office and commercial are now in the active play. But the local developers, most of them are focused on the trading of residential units because traditionally, that's where they come from."

The DBS Towers I and II, Liang Court and SIA Building were all sold to international funds in recent years.


By Jeana Wong, Channel NewsAsia
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Old February 3rd, 2007, 06:08 AM   #19
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I was just noticing that the UIC Bldg expression of interest would close by next week (Feb. 8th).

My guess is, considering the guide price of $830 million, plus the number of foreign funds and developers who may want to chase the site, the winning bid will be about $925 million (total development costs of around $1.55 billion / $1,725 psf on 898,000 sq.ft. GFA).

Thinking that we will get a combination of office, retail, and serviced apartment.

Anyone else have any predictions?
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Old February 3rd, 2007, 06:27 AM   #20
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sounds like another BFC-like combination....whoever clinches UIC may also want to get hold of Shenton House next door
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