Retail, office strata lots at former Chevron House put up for sale

Retail podium is 80% pre-committed to a diverse mix of domestic and international tenants

Wed, Sep 04, 2019


FIVE strata lots for retail and office use, spanning seven storeys at 30 Raffles Place, have been launched for sale by joint marketing agents JLL and Cushman & Wakefield.

The building, formerly known as Chevron House, is undergoing comprehensive asset enhancement initiative (AEI) works, with property developer Oxley Holdings having agreed to sell it to Golden Compass, the investment vehicle of US real estate fund AEW.

The guide price for the retail space is S$5,000 to S$5,500 per square foot (psf) of net lettable area (NLA); that for the office space is S$3,000 to S$3,300 psf, based on strata floor area.

Based on The Business Times' calculations, the guide prices work out to a total indicative price tag of between S$461.7 million and S$507.9 million, in the event that all five lots are purchased together. The strata lots can be purchased individually or collectively, or on a per-floor basis.

The property will be marketed through an expression of interest exercise, which closes at 3pm on Oct 10.

The retail podium comprises two strata lots, spread across four storeys from Basement 2 to Level 2. It has a NLA of 51,376 square feet (sq ft) and a strata area of 61,516 sq ft.

The retail podium is 80 per cent pre-committed to a diverse mix of domestic and international tenants which run businesses in areas such as food and beverage, fitness and retail.

Additional income from media screens, advertising spaces, outdoor seating areas, event spaces and ATM machines will belong to the retail owner, because common walkways are part of the retail strata area.

Clemence Lee, senior director of capital markets at JLL, said the strata lots represent an "extremely rare opportunity" to buy a new income-generating retail asset in a high-traffic location.

The office podium, on the other hand, comprises three strata lots spanning Levels 3 to 5, with a total strata area of 58,286 sq ft, accessible via escalator from Level 1.

Each floor of the office space features a generous floor-to-floor height of 4.2 to 5.14 m.

The building is a thoroughfare for professionals working in and around the central business district.

The marketing agents also noted that the office podium is "highly visible" from the Raffles Place commercial square, and that owner-occupiers or tenants could potentially enjoy signage rights in a space with high footfall.

Shaun Poh, executive director of capital markets at Cushman & Wakefield, said Singapore's commercial real estate market has recently appeared on the radar of international property players, particularly investors from Hong Kong, including family offices and high-net-worth individuals.

He said: "This sale presents another opportunity for foreign players to invest in a trophy asset. The building's commanding position, with high pedestrian footfall in Raffles Place, will make its naming rights and signages extremely valuable."

Oxley expects to complete the building's AEI works by the first quarter of 2020. The refurbishment costs about S$100 million.

Major AEI works include a new mechanical and equipment (M&E) plant, a new facade, as well as the upgrading of toilets, lifts and lift lobbies. Work on the retail podium will include converting car park space to retail space, reconfiguring the layout, new end-of-trip facilities and structural strengthening.

Under the deal inked in April, Oxley was to sell its wholly owned subsidiary, Oxley Beryl, which owns Chevron House, to Golden Compass for S$1.025 billion.

In June, Oxley received proceeds of S$210 million following the completion of the sale.

Golden Compass will pay the balance and discharge Oxley Beryl's loans after the AEI works are done, and after the retail and banking units in the building have been divested.