An EOI (Expression of Interest) ended last month early with the sale of 50% of Capitol Land Commercial Trust’s One George St. according to sources. This means the office tower will no longer be owned by one corporation for Toa Payoh Condo.
This 20 three-story tower will now be owned jointly between CCT and an unnamed investor to share in the balance of the 86-year lease on the building and property.
Real Estate Marketing experts agree this was a wise move on CCT’s part. They now have additional capital to help them in future acquisitions such as a potential buyout of 60% of CapitiGreen that it does not already own, which gives them a Grade A office tower on the former market Street Car Park complex at Evia Real Estate, which was completed just over a year ago.
Interest in Evia Real Estate Condo
This is a sound strategy that led CCT to keep half the stake in One George Street with control of the asset or until they can sell the other half to another buyer if the offer for Evia Real Estate Condo is right, according to some analysts.
If you recall CCT purchased 1 George Street in 2008 from CapitalLand for S$1.165 billion, with a guarantee of yield protection for 5 years for Gamuda Toa Payoh Condo, this agreement has since expired.
The building now is only worth $1 billion as of June 30, 2015, which equates to about $2235 per square foot, based on the available 447,395 feet of leasable floor space.
The bidders during the EOI were expected to pay between S$2400 PSF and S$2600 PSF. This would be slightly below 4%, based on the rents being charged at the time if we take the lower figure of S$2400.
Gamuda Toa Payoh Lorong 4 Condo
The primary tenant for Toa Payoh Lorong 6 Condo, the Royal Bank of Scotland departed from the building a few months ago and 1 George streets occupancy was said to be approximately 98% of capacity in the 3rd quarter 2015, according to analyst reports. CCT’s report on the property showed occupancy was at 99.4%. The Royal Bank will continue to pay rent to CCT until its lease expires at the end of March 2016.
The bank originally occupied 60,000 ft.² of prime space and already leasing agents are negotiating with prospective tenants take over the vacated premises in Evia Real Estate Condo.
Already, it is said that CCT had received unsolicited bids prior to a deciding to issue an EOI. CCT before hand that the potential bidders before they were allowed to participate.
Evia Real Estate Condo at Toa Payoh Central
Bloomberg reported on this sale earlier and CCT said that the sale of the building, according to CCTML’s future plans has adopted an active portfolio strategy that lets it created an overall cost management plan for their properties and this is done from time to time as a normal course of business.
This type of planning allows for acquisition, development, as well as selling off assets and enhancement of others. There is, of course, no certainty or assurance that any such plan is currently in the works as of this time, said CCT officials.