Market Street car park to stay

Source : Today - 7 Jan 2009

CAPITACOMMERCIAL Trust (CCT) has scrapped plans to redevelop the Market Street car park into a grade A office building, which could have cost up to $1.5 billion.

“The manager, after taking into consideration the uncertain market outlook, tight credit conditions, high redevelopment cost and significant size of the project, has decided to abort the project immediately,” the Singapore-listed real estate investment trust, which has a portfolio of 11 commercial properties here, said yesterday.

The statement also said that CCT had secured the refinancing for $580 million in debt maturing in March.

CCT had initially planned to make a decision on the redevelopment after this mid-year.

The latest move is “in line with our prudent approach to capital management and the need to conserve cash in such turbulent economic times”, said Ms Lynette Leong, chief executive of CCT’s manager.

“This decision provides certainty to our investors in removing any overhang in capital requirement. It will also give assurance and security of tenure to our car park users as well as retail tenants,” she said. “CCT can move on to enter into longer-term leases and adopt longer-term plans through repositioning the retail tenant mix and other promotional events or activities to inject vibrancy into the area.”

The new financing arrangements also provide “financial flexibility in managing our capital and balance sheet”, said CCT.

It entered into a secured three-year term loan for up to $580 million with DBS Bank, Standard Chartered Bank, United Overseas Bank and The Bank of Tokyo-Mitsubishi UFJ.

The new facility is secured by a mortgage and other securities of one property, while the maturing debt was secured by seven properties.