The AXA Tower site will see a mixed-use project with 268 apartments, 100 hotel rooms, 847,808 sq ft GFA of offices and 86,187 sq ft of retail space, while PIL Building will be redeveloped into 212,888 sq ft GFA of offices and 7,707 sq ft of retail space. Source: Google Maps

The provisional permissions granted by the Urban Redevelopment Authority (URA) in Q3 2021 for the redevelopment of AXA Tower and PIL Building has proved market observers’ expectations wrong.

Market watchers expect the redevelopment of ageing office buildings within the Central Business District (CBD) to result in a shrinkage of office space supply within the district in the mid- to long-term, reported The Business Times (BT).

However, the new project on the AXA Tower site, which was granted URA’s provisional approval, will generate around the same or slightly more office space based on a net lettable area (NLA) compared to what is currently in the building, while the PIL Building’s proposed redevelopment will lead to a significant increase in office space.

A joint-venture between a Perennial Holdings-led consortium and Alibaba Singapore has received provisional approval from URA to redevelop the AXA Tower site in Shenton Way into a mixed-use project with 268 apartments, 100 hotel rooms, 847,808 sq ft gross floor area (GFA) of offices and 86,187 sq ft of retail space.

A back-of-the-envelope calculation by BT indicates that the office space “could translate to about 678,000 sq ft to 720,000 sq ft NLA, assuming 80% to 85% building efficiency ratio (ratio of NLA to GFA)”.

“This is close to or slightly above AXA Tower’s existing office NLA of about 680,000 sq ft,” said BT.

Located opposite Tanjong Pagar MRT station, AXA Tower occupies a 118,230 sq ft site with a 60-year balance leasehold tenure. An application to top up the site’s lease to a fresh 99 years is understood to have been made by the owners of the site.

Meanwhile, provisional approval has also been granted by URA in Q3 to TE Capital Partners, which formed a consortium to acquire the 17-storey PIL Building for around $330 million.

The building along Cecil Street is being acquired by a joint venture between LaSalle Investment Management and a TE Capital Partners-managed vehicle.

Based on the URA approval, the property will be redeveloped into 212,888 sq ft GFA of offices as well as 7,707 sq ft of retail space.

BT said its calculations point “to the office NLA being about 170,000 sq ft to 181,000 sq ft, a big jump from the existing 107,000 sq ft”.

Zoned for commercial use under the 2019 Master Plan with a plot ratio of 11.2, the PIL Building site comprises three plots of land with a total area of 1,812 sq m (19,504 sq ft).

The largest plot spans nearly 1,392 sq m and has a freehold tenure. The two smaller plots, on the other hand, measure about 142 sq m and 278 sq m, respectively. Both sites have a leasehold tenure of 99 years commencing from May 1977.

It is understood that in-principal approval has been granted to upgrade the two plots’ tenures to freehold.

Source: CommercialGuru, 17 Nov 2021