The Business Times | MARCH 22, 2013
The group expects it to pull in $80m in annual rental income by 2015
Having undergone its topping out ceremony, The Metropolis, Ho Bee Investment's one-north office development, is just months away from completion.
The 1.1 million sq ft, Grade A-specification building is expected to receive a Temporary Occupation Permit for its first tower in July, and for its second tower in September, just 21/2 years after development began.
Despite rising construction costs and new government regulations on foreign workers restricting labour, The Metropolis is set to be completed ahead of schedule. Ho Bee chairman Chua Thian Poh attributed this to main contractor Lum Chang's good work on the project.
Construction is not the only area in which The Metropolis has a head start. To date, the development has a 60 per cent tenant pre-commitment rate for its total lettable area.
Mr Chua said The Metropolis was also the most successful development this year in attracting blue- chip tenants.
According to data collated by CBRE, four out of five of the largest office lease commitments in the past six months were secured by The Metropolis. These were from Procter & Gamble, Shell, Neptune Orient Lines, and Singapore Exchange.
Ho Bee has also successfully engaged gym operator Fitness First, as well as F&B outlets including Starbucks, Simply Bread, and Peach Garden, to take up tenancy in The Metropolis. The Ho Bee group is shifting its own headquarters to the new building as well.
Marcus Loo, executive director of office services at Colliers International, was not surprised by the high pre-commitment rate for The Metropolis, even with its location outside the CBD. "The Singapore office supply for buildings in the CBD are few and far between," he said.
While the lettable office and retail space has not yet been filled, Ho Bee expects to have full occupancy by next year.
One factor working in the group's favour is the building's low development cost of $800 million. Ho Bee can thus afford to offer cheaper rental rates than those for CBD office spaces.
Ho Bee stated an average price of $6-7 psf for office leases and $8-15 psf for retail. Furthermore, the burgeoning one-north district is now even more viable for commercial operations, Mr Chua said.
Discussing Ho Bee's strategy, Mr Chua said the group is focused on investments that generate steady recurring income, something he hopes The Metropolis will provide.
"I think it will be one of our major income sources and will underpin Ho Bee's next phase of growth," he said. Ho Bee expects The Metropolis to pull in around $80 million in annual rental income by 2015.
Martin Koh | 86666 944 | R020968Z
Sherry Tang | 9844 4400 | R020241C
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DTZ Property Network Pte Ltd (L3007960A)