Check out these 4 big-time potential tenants for Ho Bee's Metropolis

25-30% initial target may be exceeded.

According to CIMB, prolonged low interest rates have prompted strong demand for hard assets and persistently low cap rates. It revisited its valuations for Ho Bee as 2013 could see a play for quality assets, with Metropolis likely to be a well sought after property.

Here's more from CIMB:

December transactions reflect premium valuations for office transactions, with the 99-year leasehold Mapletree Anson (NLA: 331,854sf) sold to Mapletree Commercial Trust for S$2,049 psf and a 3.0-3.4% implied cap rate and the freehold 79 Anson (NLA: 202,092sf) sold today to United Engineers for S$2,029 psf and an implied net yield of 2.7%.

Demand for investment assets and quality office properties with large floor plates places Metropolis in good stead for a potential divestment in 2013. While management intends to maintain a certain proportion of recurring income, we think that the company’s track record (e.g. Hotel Windsor divestment) suggests that it might be open to selling assets if offered a premium price.

We currently value Metropolis at 4% cap rate, which could present further upside with recent office transactions at sub-3% to 3.4% implied cap rates.

We estimate that 50-60% of space could be pre-committed when leases are signed given the strong interest expressed so far, ahead of the initial target of 25-30%.

Potential tenants include Procter & Gamble (160k sf), Shell (120k sf), NOL (100k-300k sf) and GlaxoSmithKline (60k sf) out of approximately 1m sf of leasable space.