Located at 140 Cecil Street, PIL Building was completed nearly four decades ago and substantially revamped in 2011.
PHOTO: GOOGLE MAPS
Upated from : The Business Times, 21 July 2020
PIL Building in Cecil Street – ultimately fully owned by the same entity that controls struggling Pacific International Lines (PIL) – has been quietly put on the market through an expression of interest (EOI) exercise that closed last Friday.
The exercise has drawn strong response; according to the grapevine, interest from eight parties was received.
The guide price for PIL Building has been set at S$350 million, which reflects about S$3,265 per square foot based on the existing net lettable area of nearly 107,200 sq ft.
Cushman & Wakefield, which is understood to have conducted the EOI, could not be reached for comment. PIL’s executive chairman and managing director, Teo Siong Seng (better known as SS Teo), declined to comment when contacted.
Located at 140 Cecil Street, the building was completed nearly four decades ago and substantially revamped in 2011.
The 17-storey office building stands on three plots of land totalling 1,812 square metres (19,504 sq ft). The biggest plot of nearly 1,392 sq metres has freehold tenure. It is flanked by two smaller land strips of about 142 sq m and 278 sq m on 99-year leasehold tenures starting from May 1977, reflecting balance terms of nearly 56 years.
PIL Building’s existing gross floor area (GFA) of 147,315 sq ft can be increased by slightly more than 71,000 sq ft before it reaches the allowable 218,447 sq ft – based on the 11.2 plot ratio stipulated for this commercial-zoned site under the Urban Redevelopment Authority’s Master Plan 2019
Back-of-the-envelope calculations by some property consultants suggest that a development charge/differential premium of about S$80 million would be payable to the state for the rights to tap the 71,000 sq ft unutilised GFA; this does not include the lease extension premium that would be payable if the authorities agree to top up the leases for the two smaller plots to 99 years.
Beyond that, some observers suggest that it may be possible for the building to qualify for a further 25 to 30 per cent GFA under the URA’s CBD Incentive Scheme unveiled last year. This is provided the URA waives the minimum plot size requirement of 2,000 sq m for a non-corner site in this part of the old CBD.
The scheme aims to spur owners of older, predominantly office buildings in some parts of the central business district to redevelop their properties into mixed-use projects. By promoting a wider diversity of uses – for example, having more residences and hotels – the scheme seeks to inject a live-in population into the CBD and liven up the district in the evenings and on weekends.
Assuming the property is sold, the PIL group of companies, which occupies some space in the Cecil Street building, is expected to lease back the space in the short term.
PIL Building is owned by PIL Realty, a fully-owned subsidiary of PIL Enterprises, which in turn is wholly-owned by PIL Holdings.
PIL Holdings is also the sole owner of the container shipping line PIL. In early-April 2018, PIL founding chairman, Teo Woon Tiong (alias Chang Yun Chung or YC Chang), stepped down from the company’s board – passing the baton to his son SS Teo. (Teo and Chang are the same surname in Chinese, Zhang).
PIL, which is the world’s 10th largest container shipping line, is in the process of being rescued by a consortium led by Temasek Holdings unit Heliconia Capital Management.
In May this year, PIL confirmed that it had entered into a six-month exclusivity agreement with Heliconia in relation to a potential investment.
Mr Teo recently stepped down as chairman of the Singapore Business Federation after serving the maximum of three terms totalling six years.