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Lian Beng-led consortium might be nearing exit from Prudential Tower

07 Jun, 2017

A consortium led by Lian Beng Group which bought Keppel Reit's space in Prudential Tower near Raffles Place MRT Station in 2014, seems to be nearing an exit from its investment in the building.

Epic Land Pte Ltd, in which Lian Beng owns a 32 per cent stake, has just put up for sale the sole retail unit in the 30-storey office building - a space of 5,715 square feet at street level - for sale through a tender.

The guide price is S$20.8 million, which works out to S$3,639 per sq ft (psf).

Featuring prominent dual frontage on Cecil Street and Church Street, the unit is tenanted to Prudential Assurance, which uses it as a service centre. The lease for this unit and its office spaces ends in March next year. The British life insurer has inked a lease at Marina One's East Tower.

Prudential Tower's sole retail unit has strong pedestrian footfall from its traffic-junction location and offers tremendous retail potential.

It enjoys a double-volume entrance, which enhances its visibility and grandeur. Subject to the relevant authorities' approval, other uses include F&B, retail, showroom or banking hall.

On April 6, the Lian Beng-led consortium announced that it had executed a non-binding letter of intent to dispose of eight strata office units spanning 55,711 sq ft in the building to an unrelated third party. Market watchers inferred that the deal would amount to nearly S$145 million - assuming the psf price fetched is the same as the S$2,600 psf at which Epic Land sold 17 strata office units adding up to 79,459 sq ft in January this year to a fund managed by One Tree Partners.

Assuming the proposed transaction that was announced in April materialises, the retail unit put on the market on Tuesday would be the consortium's last remaining space at Prudential Tower.

Epic Land acquired 230,703 sq ft in the building from Keppel Reit in May 2014 for S$512 million or S$2,219 psf on strata area. Located on levels 1 and 10 to 29 (except part of Level 16), the space is equivalent to 92.8 per cent of Prudential Tower.

Epic Land began reselling the space later in the same year. Prior to the sale to One Tree Partners, the previous office units that it resold at Prudential Tower went for above S$2,700 psf.

Epic Land's other shareholders are KSH Holdings (28 per cent), KOP Limited (25 per cent) and Centurion Global (15 per cent).

Currently, the site on which Prudential Tower stands has a balance lease tenure of about 77.5 years.

Keen interest from investors is expected for the retail space on the building's ground floor given its ultra-high visibility to both vehicular and pedestrian traffic.

Such an opportunity in the heart of Raffles Place is hardly available. In every major city, retail units with such prominent street frontage are extremely sought after by businesses.

Adapted from: The Business Times, 7 June 2017