Tanglin Road site goes at 124% above guide rent

July 18, 2008
Tanglin Road site goes at 124% above guide rent
By ARTHUR SIM

THE former Ministry of Home Affairs complex at Phoenix Park, off
Tanglin Road, has been awarded to LHN Group for $368,888 a month - a
huge 124 per cent more than the guide rent of $165,000 a month.

The site, with a gross floor area of 143,195.4 sq ft, is managed by
the Singapore Land Authority (SLA). The tender attracted 11 bids - 10
of them at or above the guide rent.

Bidders included United Engineers Developments (UE) which put in the
second-highest offer of $315,033 per month.

Teo Cher Hian, director of land lease (private) with SLA's land
operations group, said LHN offered the 'best value for the state'
based on allowable uses, business concept, track record and corporate
financial health.

LHN plans to configure the site into separate tenant clusters, he
said. The adjacent former Education Ministry headquarters now houses
the Youth Olympic Games headquarters. And with more office set-ups
pending, Phoenix Park 'completes the area as an office hub', said Mr
Teo.

LHN is the master tenant for other state properties, including the
former Gan Eng Seng School and CID Training Centre.

LHN managing director Kelvin Lim said the investment cost at Phoenix
Park is expected to be about $4 million. He estimates that rents
could be around $6 psf per month when it opens at the year-end.

Rising office rents are forcing more businesses to consider
alternative office space like Phoenix Park. UE, for instance, had
intended to use most of the space to house its own engineering
operations, and to lease the rest to other tenants. 'The existing
structures and layout would also allow rather quick occupation with
minimal works,' a UE spokesman said.

Marine engineering firm Allbest Equipments, which was awarded the
former Monk's Hill Secondary School site by SLA, also expects to
relocate its corporate offices there.

Allbest put in the highest bid of $211,328 per month for the site,
which has a GFA of 83,889.5 sq ft.

Seven bids were received, with Allbest's 43 per cent higher than the
guide rent of $147,300.

Allbest general manager Chan Cheong Hoy said it will lease the
remaining space at $7.50-$10 psf a month and expects to complete the
first phase of renovations within four months.

Cushman and Wakefield managing director Donald Han said that as well
as getting such properties ready to let as quickly as possible,
developers have to keep construction costs under tight control to
ensure their projects are feasible.

Mr Han says that in the Newton area transitional office space is
going for $7.50-$8 psf a month, while the former Gan Eng Seng School
could achieve $4.50-$5 psf a month.