Tuesday, February 1, 2011

CCT still mulling Market Street Car Park project despite official nod

CAPITACOMMERCIAL Trust (CCT) confirmed yesterday that it has obtained provisional permission for the redevelopment of Market Street Car Park, but stressed that it has not decided if it would embark on the project.

CCT was responding to a BT report last Saturday, which said that the commercial real estate investment trust received provisional permission in November last year to turn Market Street Car Park into an office tower.

Market Street Car Park is located at 146 Market Street and its lease expires in 2073. The new office building could have a gross floor area of around 854,400 square feet.

CCT said that its manager was evaluating the redevelopment and 'has not arrived at any decision at this point'. It advised unitholders to exercise caution in trading CCT units as there is no certainty that the proposed project would materialise.

Back in January 2008, CCT announced that it had obtained outline planning permission (OPP) to redevelop Market Street Car Park into a Grade A office tower.

The authorities granted the OPP on two conditions: there would be no extension of the present lease, and CCT would have to pay a development premium equal to 100 per cent of the enhancement in land value. CCT estimated then that the total project cost would be $1 billion to $1.5 billion.

Later in 2009, CCT dropped the project, citing its significant size, the high redevelopment cost, an uncertain market outlook and tight credit conditions as reasons. The OPP was allowed to lapse.

CCT said yesterday that its manager submitted a new application and obtained provisional permission for the redevelopment of Market Street Car Park as part of a portfolio evaluation exercise.

'However, material issues, such as the determination of the differential premium payable to the Singapore Land Authority for the lifting of the title restriction of the property and other matters, are still being evaluated,' CCT added.

'It is premature to make any definitive conclusion regarding the feasibility of the proposed redevelopment.'

On the stock market yesterday, CCT lost three cents to close at $1.43.

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