SINGAPORE (THE BUSINESS TIMES) - Singtel will jointly redevelop its Comcentre headquarters for an estimated cost of more than $2 billion, including land costs, the telco said on Wednesday (Feb 23).
This comes as Singtel looks to maximise the Comcentre site's potential and increase building efficiency, allowing the company to unlock value from the property.
Upon its estimated completion in 2028, the new Comcentre at 31 Exeter Road is expected to have a total gross floor area of over 110,000 sq m comprising Grade A office buildings, a retail component and Singtel's existing Orchard Exchange that houses telecom infrastructure.
The telco plans to incorporate sustainable designs and digital technologies into the office, styling it as a "next-generation office development" that will house Singtel's headquarters and offer hybrid workplaces to its other tenants.
Singtel will remain the anchor tenant, occupying 30 per cent of the space, with the remaining space to be leased out and serve as a recurring income stream.
The developer for the project has yet to be decided, although Singtel has shortlisted two companies in the first phase of the tender based on the developers' design concept, asset valuation and track record.
The tender process will close in March and the company expects to make the final appointment by May.
JLL will advise the transaction in its capacity as a real estate adviser.
Following the redevelopment and as a part of its capital recycling strategy, Singtel plans to divest Comcentre to a joint venture company it will form with the appointed developer.
Singtel will hold the majority stake in this new joint venture, the press release said.
The telco has also obtained in-principle approval from the Singapore Land Authority to extend the lease on all the lots that make up Comcentre to 2089.
Singtel Group chief executive Yuen Kuan Moon said: "Maximising the unique development potential of Comcentre will significantly enhance its value in a vicinity where Grade A office developments are in short supply.
"We strive to optimise the capital we can unlock from existing assets to fund our growth initiatives including 5G and the regional expansion of our data centre business."
He added: "The redevelopment of our headquarters also supports our vision to build a greener and sustainable future and will further facilitate our efforts to reach net zero for our own operations."
In preparation for the redevelopment, Singtel will relocate from Comcentre in 2024 and employees will shift to temporary spaces at other Singtel premises across the island.
Comcentre has been Singtel's headquarters since 1979 and is currently built on a site area of 19,252.6 sq m. It was the first skyscraper in Singapore to house microwave dishes on the rooftop to transmit signals.
Shares of Singtel closed at $2.56, down two cents or 0.8 per cent on Tuesday, before the announcement.