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02-06-2011, 06:26 AM
Jun 2, 2011
Plans for mall and office project in Jurong Lake District
By Esther Teo, Property Reporter
A SHOPPING mall and office complex with a total development cost of $1.5 billion is set to be built beside Jurong East MRT station as rejuvenation plans for the area continue gaining traction.
A consortium of CapitaMalls Asia (CMA), CapitaMall Trust (CMT) and CapitaLand said yesterday they plan to build a 25-storey retail and office development.
They said the project will benefit from synergies with their two nearby properties - IMM, which is currently operating, and JCube, which is still under construction.
The group had last week submitted a bullish top bid of $969 million for the second mixed-use site in Jurong Lake District in a move that surprised many industry analysts. This worked out to $1,012 per sq ft (psf) per plot ratio (ppr).
The consortium, however, justified its bid yesterday, saying the proximity of all its three properties will allow for synergies that can help bring down operational costs. All three malls are within a three-minute drive of one another.
The new mall will be a family and lifestyle mall, while IMM is a value-focused one. JCube, with an Olympic-size ice rink, will be an entertainment-focused option.
The project occupies a prime location in Jurong Lake District, which is 21/2 times the size of Tampines Regional Centre and will be the largest commercial centre outside the city, they added. There is also a lack of quality office space in Jurong.
CMA chief executive Lim Beng Chee said the acquisition will increase the firm's net lettable area in Jurong to 1 million sq ft - twice the size of Plaza Singapura.
With IMM already housing anchor tenants like Giant and Daiso - which pay lower rents - and Shaw cineplex slated to open at JCube, the newest site can focus on securing complementary mini-anchor tenants that pay higher rents instead.
This means retailers taking up space of 15,000 sq ft to 18,000 sq ft, bringing up average rents at the five-storey mall to about $16 to $18 psf a month.
Mr Simon Ho, chief executive of CapitaMall Trust Management, manager of CMT, added that the mall will also act as a regional mall, serving more than one million residents.
The project's office component is also expected to secure average rents of about $7 to $8 psf a month, likely more than rents at a neighbouring site secured by Australian developer Lend Lease in June last year, Mr Ho said.
The Ministry of National Development (MND) has signed a 30-year lease for 29,300 sq m of office space at Lend Lease's mixed-use development. Lend Lease had paid $749 million - or $650 psf ppr - for the plot.
Mr Ho said market talk was that rents were secured at about $5.50 psf a month as it is a bulk deal.
'When it comes to leasing our office block, we ask ourselves, 'Do we need to go en bloc?' Probably not, the office market is made and people know that MND is there.
'Government agencies will want to move there but do we need to accede to a price of $5.50? Probably not... We have choices on who we want to bring in,' Mr Ho added.
Plans for mall and office project in Jurong Lake District
By Esther Teo, Property Reporter
A SHOPPING mall and office complex with a total development cost of $1.5 billion is set to be built beside Jurong East MRT station as rejuvenation plans for the area continue gaining traction.
A consortium of CapitaMalls Asia (CMA), CapitaMall Trust (CMT) and CapitaLand said yesterday they plan to build a 25-storey retail and office development.
They said the project will benefit from synergies with their two nearby properties - IMM, which is currently operating, and JCube, which is still under construction.
The group had last week submitted a bullish top bid of $969 million for the second mixed-use site in Jurong Lake District in a move that surprised many industry analysts. This worked out to $1,012 per sq ft (psf) per plot ratio (ppr).
The consortium, however, justified its bid yesterday, saying the proximity of all its three properties will allow for synergies that can help bring down operational costs. All three malls are within a three-minute drive of one another.
The new mall will be a family and lifestyle mall, while IMM is a value-focused one. JCube, with an Olympic-size ice rink, will be an entertainment-focused option.
The project occupies a prime location in Jurong Lake District, which is 21/2 times the size of Tampines Regional Centre and will be the largest commercial centre outside the city, they added. There is also a lack of quality office space in Jurong.
CMA chief executive Lim Beng Chee said the acquisition will increase the firm's net lettable area in Jurong to 1 million sq ft - twice the size of Plaza Singapura.
With IMM already housing anchor tenants like Giant and Daiso - which pay lower rents - and Shaw cineplex slated to open at JCube, the newest site can focus on securing complementary mini-anchor tenants that pay higher rents instead.
This means retailers taking up space of 15,000 sq ft to 18,000 sq ft, bringing up average rents at the five-storey mall to about $16 to $18 psf a month.
Mr Simon Ho, chief executive of CapitaMall Trust Management, manager of CMT, added that the mall will also act as a regional mall, serving more than one million residents.
The project's office component is also expected to secure average rents of about $7 to $8 psf a month, likely more than rents at a neighbouring site secured by Australian developer Lend Lease in June last year, Mr Ho said.
The Ministry of National Development (MND) has signed a 30-year lease for 29,300 sq m of office space at Lend Lease's mixed-use development. Lend Lease had paid $749 million - or $650 psf ppr - for the plot.
Mr Ho said market talk was that rents were secured at about $5.50 psf a month as it is a bulk deal.
'When it comes to leasing our office block, we ask ourselves, 'Do we need to go en bloc?' Probably not, the office market is made and people know that MND is there.
'Government agencies will want to move there but do we need to accede to a price of $5.50? Probably not... We have choices on who we want to bring in,' Mr Ho added.
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