Retail podium, office space at former Chevron House up for sale

An artist's impression of the retail podium at 30 Raffles Place, formerly known as Chevron House. The building's retail and office strata lots can be purchased individually or collectively.
An artist's impression of the retail podium at 30 Raffles Place, formerly known as Chevron House. The building's retail and office strata lots can be purchased individually or collectively. PHOTO: JLL, CUSHMAN &WAKEFIELD

SINGAPORE - Five strata lots for retail and office use spanning seven storeys at 30 Raffles Place have been launched for sale by joint marketing agents JLL and Cushman & Wakefield.

The building, formerly known as Chevron House, is undergoing comprehensive asset enhancement initiative (AEI) works, after property developer Oxley Holdings agreed to sell it to Golden Compass, the investment vehicle of US-based real estate fund AEW.

For the retail space, the guide price is $5,000-5,500 per square foot (psf) of net lettable area (NLA), while the office space is available at a guide price of $3,000-3,300 psf based on strata floor area.

That works out to a total indicative price tag of some $461.7 million to $507.9 million, in the event that all five lots are purchased together.

The strata lots can be purchased individually or collectively, or on a per-floor basis.

The property will be marketed through an expression of interest exercise which closes at 3pm on Oct 10.

The retail podium consists of two strata lots, spread across four storeys from Basement 2 to Level 2. It has a NLA of 51,376 square feet (sq ft) and a strata area of 61,516 sq ft.

The retail podium is 80 per cent pre-committed to a diverse mix of domestic and international tenants in industries including food and beverage, fitness and retail trade.

 
 

Additional income from media screens, advertising spaces, outdoor seating area, event spaces and ATM machines will also belong to the retail owner, because the common walkway forms part of the retail strata area.

This offers investors an "extremely rare opportunity" to acquire a new income-generating retail asset in a high-traffic location, said Clemence Lee, senior director of capital markets at JLL.

As for the office podium, it consists of three strata lots spanning Level 3 to Level 5 of the building, with a total strata area of 58,286 sq ft. It can be accessed via escalator from Level 1.

Each floor of the office space features a generous floor-to-floor height of 4.2 to 5.14 metres, with a full-height curtain wall window which allows natural light in.

"With significant frontage and a direct link from Basement 1 into the Raffles Place underground network and MRT station, the property is one of the most recognisable commercial assets in Raffles Place," the marketing agents said.

The retail podium will enjoy heavy footfall from professionals working in and around the central business district, while the office podium is "highly visible" from the Raffles Place commercial square and owner-occupiers or tenants can potentially have signage rights onto the square, they added.

Shaun Poh, executive director of capital markets at Cushman & Wakefield, said that Singapore's commercial real estate market has recently seen a wave of interest from international property players, particularly investors from Hong Kong such as family offices and high net worth individuals.

"This sale presents another opportunity for foreign players to invest in a trophy asset. The building's commanding position with high pedestrian footfall in Raffles Place will make its naming rights and signages extremely valuable," Mr Poh noted.

Oxley expects to complete the building's AEI works by the first quarter of 2020. The refurbishment costs about $100 million.

Major AEI works include a new mechanical and equipment (M&E) plant, new facade work, as well as the upgrading of toilets, lifts and lift lobbies.

For the retail podium specifically, the AEI works will also include converting car park space to retail space, reconfiguring the layout, new end-of-trip facilities and structural strengthening.

Under a deal inked in April, Oxley is to sell its wholly owned subsidiary, Oxley Beryl, which owns Chevron House, to Golden Compass for $1.025 billion. In June, Oxley received aggregate proceeds of $210 million after the first completion of the sale. Golden Compass will pay the balance of the consideration and discharge Oxley Beryl's bank loans after the AEI works are complete, and after the retail and banking units in the building have been divested.