CCT to raise funds for the Golden Shoe Car Park redevelopment

It is set to add around 1m sq ft. of commercial gross floor area.

For CapitaLand Commercial Trust, the Golden Shoe Car Park development may be a catalyst to watch out for.

According to RHB, the trust has submitted plans to the authorities to redevelop Golden Shoe Car Park, which is expected to commence in 2H17 and completed by 2021. This is set to add around 1m sq ft of commercial GFA in Singapore's central business district once fully redeveloped.

"Based on a similar redevelopment of Market Street Car Park, we estimate total development costs (including a differential premium) to be in the range of $1.5-2b that is to say around $1,500-2,000psf. With recent Grade-A office transactions still hovering above SGD2,500psf, we believe the latest redevelopment could unlock good value for its shareholders.," RHB said.

The brokerage firm noted that its plans to sell 50% of its stake in One George Street could eliminate funding concerns for the development.

"With a flurry of capital chasing good quality office assets in 2016, we believe that there is good possibility of a sale happening. If it goes through, the sale could potentially raise $550-600m in proceeds, which in turn could be effectively redeployed for the redevelopment of GSCP without the need for any equity issuance," it noted.