CAPITAGREEN, the S$1.4 billion Grade A office tower that has been developed on the former Market Street Car Park site, has seen its committed occupancy rise to 83 per cent, from 80.4 per cent as at end-June this year.
The 40-storey building is home to some 30 multinational companies from diverse industry sectors including insurance, energy and commodities, technology and e-commerce, as well as financial services, said CapitaLand’s president and group CEO, Lim Ming Yan, at the official opening ceremony for the building on Wednesday.
Tenants secured include Bordier & Cie, Cargill, Catlin Asia Pacific, China Life Insurance, Fitness First, Jardine Lloyd Thompson, Jones Day, Lloyds Banking Group, Rakuten, Schroders Investment Management and South32 (a spin-off from BHP Billiton).
The building has received the Building and Construction Authority’s Green Mark Platinum Award. The building’s total net lettable area is 703,000 square feet. CapitaGreen, which received Temporary Occupation Permit (TOP) on Dec 18, 2014, was developed by a consortium comprising CapitaLand, CapitaLand Commercial Trust (CCT) and Mitsubishi Estate Asia. The three partners’ respective shares are 50 per cent, 40 per cent and 10 per cent. CCT has a call option to buy the other two partners’ stakes within three years of the TOP date.
Among the considerations for CCT on the timing for the exercise of the call option is that “we would like the acquisition to be accretive to unitholders”, said Lynette Leong, CEO of CapitaLand Commercial Trust Management Limited. “The building is progressively being leased out and most of the tenants will start paying rent from the second half of this year. So the positive contribution to CCT’s distributable income will occur from next year onwards. So only then, may the acquisition be accretive. Of course, that depends on what the price is.” The purchase price will be at market valuation, subject to a minimum of development cost compounded at 6.3 per cent per annum.
Half of the S$1.4 billion development cost comprised differential premium (DP) and land-related costs. DP was payable to the state for the change of use of the site from transport to commercial. The authorities declined to top up the site’s lease. At the time of CapitaGreen’s TOP in December 2014, the site had a remaining lease term of 58 years.