Tenants of office tower told to leave by year-end

Notification of redevelopment sent late May, catching some recent tenants by surprise

Tenants at a 44-year-old office tower in the financial district have been told to pack up and leave by the end of the year as its owner has plans to redevelop the plum site next year.

Some tenants who have recently moved in, spending up to $100,000 on renovations, are unhappy to be forced out so soon.

The owner of the 28-storey building, Hub Synergy Point, at the corner of Enggor Street and Anson Road, sent out notification letters to the 30 or so tenants late May.

After the building is vacated, construction work will begin "soon after" and the new building will be ready by 2020, according to a letter seen by The Straits Times.

The move came as a surprise to some tenants, including those who moved into the building recently.

For instance, local food and beverage firm Prive Group took up a 4,500 sq ft office space in May and has already spent nearly $100,000 on renovations.

  • 28

  • Number of storeys in the 44-year-old building; the maximum height allowed there is 35 storeys, according to URA.
  • $30m

  • Amount paid for the top three floors in 2015 by a company majority owned by Mr Ho Kian Cheong of Keng Seng Group.

Prive Group chairman Yuan Oeij said: "It is not just about renovation costs, but the disruption of our business. It takes a lot of effort to move.

"But now that this has happened, we just want to make sure we are treated fairly."

Eatery Jiak Kopi Cafe, which also spent more than $100,000 on renovations, began operations on the ground floor of the building at the end of February.

Cafe owner Mr Kho Long Huat said he would not have renovated had he known about the redevelopment plans when he signed the lease agreement last December.

"We are just a small business," said Mr Kho, who is also the managing director of a construction company. "It is unfortunate that our investment is now going down the drain."

Analysts say the motivation behind the redevelopment plans for Hub Synergy Point in Anson Road could be to maximise the land's plot ratio or to rejuvenate the building, built in 1973, to attract future tenants.
Analysts say the motivation behind the redevelopment plans for Hub Synergy Point in Anson Road could be to maximise the land's plot ratio or to rejuvenate the building, built in 1973, to attract future tenants. ST PHOTO: CHARMAINE NG

Prive Group is seeking an arrangement with the building owner that is "fair" for both parties, while the eatery's attempts at seeking compensation have been rejected.

The management office declined comment, despite multiple requests from The Straits Times.

Not all tenants, however, were troubled by the redevelopment notice. The lease agreement includes a clause that states that the landlord has to give at least four months' notice to terminate the tenancy in the event of plans to redevelop the building.

Recruiting company iKas Group, which has been leasing an office at the building for six years, said it already had plans to move out.

"We have been here for a while and it would be nice to move to a new place," said its manager Adam Davies.

Hub Synergy Point came under single ownership in 2015, after a company majority owned by Mr Ho Kian Cheong of Keng Seng Group bought the top three floors for a total of nearly $30 million.

The company bought the 26th storey for $9.97 million or $2,400 per sq ft (psf), and the 27th and 28th storeys for $20 million or $1,512 psf, reported The Business Times.

Under a single ownership, the building's owner can redevelop the building to maximise its potential value. The site is about 250m from Tanjong Pagar MRT station.

Analysts say the motivation behind the redevelopment could be to maximise the land's plot ratio.

Hub Synergy Point has 28 storeys while the maximum height allowed there is 35 storeys, according to the Urban Redevelopment Authority.

Mr Chris Koh, director of real estate agency Chris International, said another reason could be to rejuvenate the building, which was built in 1973, to attract future tenants.

And with the office rental market expected to be flat this year, it is timely to carry out redevelopment plans now, he added.

A version of this article appeared in the print edition of The Straits Times on July 01, 2017, with the headline 'Tenants of office tower told to leave by year-end'. Print Edition | Subscribe