CapitaLand and Lendlease are competing for pole position for a S$2 billion ($1.5 billion) redevelopment project as Singapore’s largest telecom provider prepares to build a new commercial complex on the site of its headquarters near the city’s Orchard Road shopping belt.
Without specifying short-listed candidates, Singtel said on Wednesday that it has narrowed its set of potential joint venture partners for the transformation of its four-decade old HQ at 31 Exeter Road to just two contenders.
“Maximising the unique development potential of Comcentre will significantly enhance its value in a vicinity where Grade A office developments are in short supply,” Singtel group chief executive Yuen Kuan Moon said in a press release on Wednesday. “We strive to optimise the capital we can unlock from existing assets to fund our growth initiatives including 5G and the regional expansion of our data centre business.”
While the firm will announce its final partner selection in May, industry sources who spoke with Mingtiandi identified the shortlisted builders as CapitaLand, which like Singtel is majority-owned by state investment firm Temasek Holdings, and Sydney-based Lendlease, which has undertaken major urban regeneration projects in Singapore including the Paya Lebar Quarter.
“With the redevelopment of Comcentre, we aim to establish a new standard for the global office of the future by combining the latest technologies and sustainable workspaces to create pleasant, collaborative and connected environments for our employees and other building occupants, catering to the increasing adoption of hybrid work strategies,” Singtel’s Yuen said.
The telecom giant, which employs around 12,000 people in Singapore, plans to develop a grade A commercial project on the site of its current building spanning a gross floor area in-line with the present 112,761 square metres (1.2 million square feet).
Occupying a 19,253 square metre site near Somerset MRT station on a 99-year leasehold, Singtel has already secured in-principle approval from the Singapore Land Authority to extend that term to 2089. Singtel is looking into the possibility of constructing an underground direct connection to Somerset MRT.
Once the building is completed by 2028, the Temasek-controlled telecom giant said it will remain as the anchor tenant, occupying roughly 30 percent of the space, while the remainder will be leased out to firms looking for quality office accommodation in the Orchard Road area.
The estimated development cost, including land premiums, is around S$1,667 per square foot of the planned GFA based on independent calculations. Upon completion of the project, Singtel said it will divest the enhanced property to the JV with the developer while maintaining a majority stake.
The majority of the planned project will be dedicated for office use, with the structure also set to include a retail component incorporating space for food and beverage outlets, as well as accommodating the telecom infrastructure currently housed in the existing property’s Orchard Exchange.
The firm said the tender process for potential development partners to present their proposals is set to close next month and candidates will be evaluated based on the quality of their design concept, asset valuation and track record.
JLL, which was appointed to advise on the project, did not respond to queries from MIngtiandi by the time of publication.
CapitaLand Vs Lendlease
CapitaLand, which has S$115 billion in total assets under management, is Southeast Asia’s largest real estate company and is known for developing some of the tallest premium offices in Singapore’s downtown core including its completion of the CapitaSpring tower in Raffles Place late last year as well as the 52-storey Capital Tower building along Robinson Road.
Should Lendlease win the Singtel tender, the project would add to the Aussie builder’s string of projects in the city-state which includes the S$3.7 billion Paya Lebar Quarter mixed-use project it completed in 2020.
Last year the company announced that it was teaming up with security firm Certis to redevelop the company’s Certis Cisco Centre in Paya Lebar after acquiring the project for S$150 million.