Tuesday, April 6, 2010

Marina House sold for $148m

FOUR property firms and an architect have joined hands to buy a prime office building in the Central Business District (CBD) and convert it into apartments.

They paid $148 million for Marina House at 70 Shenton Way, according to a press release from one of the companies yesterday.

Roxy-Pacific Holdings said it has formed a consortium with Macly Capital, Pinnacle Assets, Fission Holdings and architect Chee Hsian Sing to buy the building. Each party will have a 20 per cent share in the purchase.

The property was sold by Hong Leong Group for a touch below the original price of $153 million it paid for the building in 1994.

The buyers of Marina House plan to convert it into a 42-storey residential block of apartments with shops on the first storey. The building now has a 17-storey office tower and a four-storey podium.

Mr Teo Hong Lim, executive chairman and chief executive of Roxy-Pacific, said he is confident the redeveloped Marina House ‘will be very much sought after’.

The supply of residential apartments in the prime CBD area is limited, he said, especially when compared to the suburban mass market sites being released for sale by the Government.

Colliers International executive director of investment sales Ho Eng Joo also said Marina House’s location on the fringe of Tanjong Pagar means it could benefit from the buzz surrounding the redevelopment of the area.

Apartments in the CBD have seen healthy demand in recent months. At 76 Shenton, down the road from Marina House, all 202 units in the project were sold out in two days last month at prices ranging from $1,600 to $2,600 per sq ft (psf).

That development, also owned by Hong Leong Group, was similarly converted from an office block into a 39-storey apartment block.

On whether too many cooks in the consortium would spoil the broth, Mr Teo said all the property developers involved are small or mid-sized firms that go back a long way and use similar architects.

‘We are also positioning for the future,’ he said. ‘Sites are going to get bigger and they are limited, so rather than compete with one another for the same site, we can work together.’

Roxy-Pacific owns Grand Mercure Roxy Hotel in Marine Parade and has developed a string of boutique condominiums in the East Coast.

Macly, Pinnacle and Fission are also boutique developers, with projects such as Thomson V in Upper Thomson, RV Edge in River Valley and Alexis in Alexandra Road respectively under their belts. Mr Chee, an architect with more than 20 years’ experience, has been involved in several joint developments with Fission.

Marina House has a gross floor area of 199,691 sq ft and 60 years remaining on its original 99-year lease. The buyers will have to pay an upgrading premium to top up the lease and a differential premium to convert the building from office to residential use, but they said these amounts were ‘minimal’. This is because Hong Leong had received provisional permission to redevelop the office building into apartments in February, before development charges were hiked last month, said Mr Teo.

The purchase price works out to about $1,050 psf per plot ratio, based on an estimated $30 million for the upgrading premium and a total floor area of about 165,000 sq ft for the new building.

Separately, City Developments, a unit of Hong Leong Group, said yesterday it has sold another 10 per cent of the 56 units released at The Residences at W Singapore in Sentosa Cove. This brings the total number of units sold to 20.

Property giant CapitaLand also said yesterday it has sold another 110 apartments in its Interlace development in Alexandra Road since it started a second phase of sales last Friday. Prices of the units sold ranged from $850 to $1,300 psf. To date, about 81 per cent of the 490 units released at The Interlace have been sold. The project has 1,040 units.

Source: Straits Times, 6 Apr 2010

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