Business Times: Tue, Jul 03
NEPTUNE Orient Lines (NOL) Group has put its 26-storey freehold Singapore headquarters building at Alexandra Road on the market to "release capital for strategic investment".
Although the shipping and logistics group said it has not decided on the reserve price, BT understands that the indicative pricing for the 29-year-old office block could be around $400 million.
This reflects about $1,928 per square foot based on the property's existing net lettable area (NLA) of 207,505 sq ft. Jones Lang LaSalle - the exclusive marketing agent for NOL Building - will conduct an expressions of interest campaign, which is expected to close by mid-August.
NOL Building stands on a 108,060 sq ft site that is zoned for commercial use under Master Plan 2008.
The building's existing gross floor area (GFA) of 294,500 sq ft is just 8,068 sq ft shy of the maximum 302,568 sq ft allowed for the site, based on the site's 2.8 plot ratio under Master Plan 2008.
Even so, there is potential to redevelop the building, as this could boost its NLA by about 52,700 sq ft arising from a higher efficiency ratio (or ratio of NLA to GFA) of about 86 per cent achievable on a brand-new project, compared with slightly above 70 per cent currently.
Assuming NOL Building is redeveloped, the $400 million indicative pricing reflects a unit land price of about $1,337 to $1,339 per square foot per plot ratio inclusive of estimated development charges of about $4.5 million to $5 million.
Whether a potential buyer is looking at simply refurbishing the existing building (through additional and alteration work) or tearing it down and redeveloping the site, an obvious angle would be to strata title the property into smaller units for sale, to ride on current strong demand for strata offices.
NOL, in its statement, said about 500 people work in the building and a decision to relocate them or remain in the existing building as a tenant will have to wait until a buyer has been identified.
JLL, in its release, said: "NOL Group currently occupies 90 per cent of the building and is expected to lease back the premises."
Depending on the buyer's requirements, NOL is willing to lease back the property on short-term to long-term basis, said Ashish Manchharam, head of investments, SE Asia, at JLL.
Market rentals for NOL Building are estimated at around $5.50-6.50 psf per month. The building has 276 car parking spaces in a separate podium.
"NOL Building provides an excellent opportunity to acquire a large freehold office building, in a well established decentralised office precinct, with asset enhancement and future redevelopment potential by maximising building efficiency and plot ratio. This offering provides the ability to capture the growing demand from occupiers seeking cost-effective, decentralised office space and for developers to tap on demand in the commercial strata space," said Mr Manchharam.
Martin Koh | 86666 944 | R020968Z
Sherry Tang | 9844 4400 | R020241C
Senior Sales Director
DTZ Debenham Tie Leung (SEA) Pte Ltd (L3006301G)
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