CPF Board moving to Novena Square
THE biggest office-leasing deal so far this year has been inked: Central Provident Fund (CPF) Board is said to be taking close to 210,000 sq ft at Novena Square's two office towers that will be vacated by Procter & Gamble (P&G) when its leases expire in mid-2015 and 2016.
P&G is moving to The Metropolis in Buona Vista, where it has signed a lease agreement for about 210,000 sq ft.
The board is believed to have inked a long-term lease at Novena Square, with options for renewals. Market talk is that the rental is likely to be $7-plus a square foot a month.
The board will be relocating its offices out of its ageing namesake building at 79 Robinson Road, one of the oldest landmark buildings in the old financial district.
The 40-odd storey building's net lettable area (NLA) is believed to be around 325,000 sq ft.
When contacted, the board confirmed it had signed a lease agreement to rent space at Novena Square Towers for its operations starting from the fourth quarter of next year.
"Under the confidentiality clause in our lease agreement with the landlord, we are unable to disclose details of the lease.
"While CPF offices housed at CPF Building will be moving to Novena Square, the CPF Main Customer Service Centre will remain at the CPF Building. Tenants will also continue to operate at the CPF Building," said the CPF Board spokesman.
"The relocation will free up prime office space in the Central Business District (CBD) for higher-value uses.
"The board is evaluating options that will maximise the value of the building," she added.
The board's offices currently occupy 70 per cent of the building.
Market talk is that the board is mulling over a sale of the building, which is on a site with a balance lease term of about 53 years.
The property has a land area of about 47,000 sq ft and is zoned for commercial use with a maximum 50-storey height.
Its maximum plot ratio is 12.88 (inclusive of bonus plot ratio for the site's size and its proximity to Tanjong Pagar MRT station), which means the property can be redeveloped into a new project with a maximum gross floor area of about 606,000 sq ft.
A new development will also be more efficient, extracting a higher ratio of NLA to gross floor area.
The Business Times understands that CBRE arranged the board's lease at Novena Square, but the property consultancy group declined to confirm this.
Market watchers said that the board will not be the first government agency to relocate its offices out of the CBD.
The move was kick-started by Singapore Land Authority in 2008, when it moved from 8 Shenton Way to Revenue House, opposite Novena Square.
Later this year, the Building and Construction Authority and the Agri-Food & Veterinary Authority of Singapore will move from MND Building in Maxwell Road to leased premises at the Jem office tower next to Jurong East MRT station.
The initiative for some government offices to move out of the CBD was announced in early 2008, to release prime office space for private-sector use amid an acute shortage of such space at the time.
An office industry market watcher reckons that although there is no office crunch at the moment, "that directive has never gone away".