Raffles Place is unlikely to lose its attraction as a business district, said Ms. Lynette Leong, CEO of CapitaCommercial Trust (CCT), which has three office properties in the area.
Despite some financial institutions moving to the Marina Bay area, Ms. Leong is seeing strong interest from existing and potential tenants for more office space in CCT’s properties in the Raffles Place area, which includes Six Battery Road, HSBC Building and One George Street.
"We believe the enlargement of the Central Business District by the extension of its boundaries … to encompass Marina Bay is well planned to meet this anticipated growing office demand," she said.
CCT, which held its Annual General Meeting yesterday, assured its 230-odd unitholders that the Singapore office market is bottoming out, and CCT intends to ride the trend of the recovery through its "well-located properties and financial flexibility".
"If the property has reached an optimal stage of its life cycle, then we will divest the asset and reinvest the sale proceeds into assets which have got better potential for upside," said Ms. Leong about CCT’s portfolio reconstitution strategy.
Under the reconstruction strategy, CCT sold one of its assets, Robinson Point, for $203.25 million to a private fund operated by AEW Asia.
Besides its properties in Raffles Place, CCT also counts Raffles City, Starhub Centre, Bugis Village, Wilkie Edge, Capital Tower, Market Street Car Park and Golden Shoe Car Park in its portfolio in Singapore.
However, Ms. Leong stressed that with the 4.5 million sq ft of office space coming on the scene in the next two years, there was uncertainty forming in the recovery of office rentals in Singapore.
CCT also told unitholders that as of end-March, the trust had tenants committed to renew about eight percent of the leases due, leaving a balance of around 16 percent of leases unrenewed.
CCT’s Distribution per unit (DPU) increased to 1.93 cents per unit in the first quarter, from 1.62 cents in the same period last year.