It was reported recently that the Central Provident Fund (CPF) Building was sold for $550 million.

ST reader Gurdip Singh asked ST: "As this building was probably built using CPF members' money, do we know what will happen to the sales proceeds and who will benefit from all the capital gains from the sale of the building ?

"Will CPF members get any share of these gains and if so, how ?"

Business reporter Rennie Whang found out.

The sale proceeds will be reinvested and the income generated will be used to defray the operational cost of the CPF Board, according a CPF Board spokesman.

Also, the building was built with the Board's past operating surpluses, which are separate from money in members' CPF accounts.

Money in members' CPF accounts is currently invested in Special Singapore Government Securities.

These earn for the CPF Board a coupon rate that is pegged to the CPF interest rates which members receive.

A firm owned by Ascendas Land (Singapore) has bought the building, which was put on sale last year. The tender attracted three bids.

Ascendas' top bid of $550 million translates to a land price of $1,032 per square foot per plot ratio, including the estimated differential premium to utilise the maximum gross floor area allowed for the site.

CPF Board, which was the main occupant in the building, has moved to Novena Square Towers.

Ascendas plans to redevelop the property into a grade-A office building with supporting retail elements.