Aviva Building, Cecil House may change hands in $101m deal

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(SINGAPORE) YI Kai Group and Fission Group, the duo that recently paid $71
million for VTB Building in Robinson Road, are said to have joined forces to
buy Aviva Building in Cecil Street and next-door Cecil House from insurer Aviva
for a total of $101 million.

Aviva is understood to be selling the
assets that it considers 'non-core'.

Market watchers reckon Fission and
Yi Kai hope to redevelop all three CBD office blocks they have snapped up
lately into residential projects - subject to official approval.

The
three sites are zoned for commercial use with an 11.2-plus plot ratio and
35-storey maximum height, according to the Urban Redevelopment Authority's
Master Plan (MP) 2008.

In October last year, URA lifted its ban on
converting office blocks in the Central Area to other uses.

Aviva and
VTB buildings are freehold. Cecil House is on a site with a remaining lease of
71 years.

Analysts suggest that Yi Kai and Fission's plans to redevelop
the Cecil House plot into apartments will be subject to getting a lease top-up
to 99 years from the state. 'Otherwise, they may redevelop the property to a
new office block,' a market watcher suggested.

BT understands the
freehold Aviva Building is being sold for about $65 million, which translates
to roughly $960 per sq ft of existing net lettable area (NLA).

Based on
the site's 11.2-plus plot ratio under MP 2008, the unit land price works out to
about $590 psf of potential gross floor area (GFA), excluding any development
charge (DC) that may be payable.

Cecil House was priced at $36 million
or about $710 psf of NLA in the sale to Yi Kai and Fission.

It is
believed there is untapped potential to develop a further 20,000 sq ft GFA each
for the Cecil House and Aviva Building plots.

The earlier sale of VTB
Building for $71 million worked out to $1,061 psf of NLA and a unit land price
of about $700 psf per plot ratio - based on an 11.2 plot ratio and assuming no
DC is payable.

Jones Lang LaSalle's director of investment sales Stella
Hoh is understood to have brokered the sale of Aviva Building and Cecil House.
JLL is also the marketing agent for two office floors at Parkway Parade that
Aviva is looking to sell.

BT understands both buildings are currently
almost 100 per cent occupied. Aviva uses about 60 per cent of Aviva
Building.

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