Singtel partners Lendlease to jointly redevelop Comcentre HQ into S$3b office project

SINGTEL : Z74 0% has named Australia-listed real estate group Lendlease as its partner to jointly redevelop its Comcentre headquarters into an office redevelopment.

In a press statement on Wednesday (Jun 1), the telco said the project will be designed by a “renowned team of architects” including New York-based Kohn Pedersen Fox.

It is estimated to carry a gross development value of S$3 billion upon completion and will be a net-zero energy development built in line with carbon neutral construction principles, added the group.

Under the joint venture (JV), Lendlease will provide development, construction and ongoing property and asset management services.

Both Singtel and Lendlease have agreed to establish a JV company which will be 49 per cent owned by Lendlease, which will pay S$1.63 billion to Singtel for the land cost of the development in or around 2024. Singtel will bear the differential premium payable. 

Singtel will own a remaining majority 51 per cent stake in the new JV.

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Including the land cost, Singtel expects the JV to incur a total cost of S$2.7 billion by the JV company. This will be funded by a combination of external financing and equity commitments from both Singtel and Lendlease.

The telco’s current expected equity commitment ranges from S$420 million to S$570 million – although the amount of Singtel’s equity commitment will to be subject to, among others, the final redevelopment plan.

Earlier in February 2022 when Singtel first announced plans to redevelop its Comcentre headquarters, market watchers told The Business Times that shortlisted parties for the first phase of the project’s tender could be Temasek-linked companies such as CapitaLand Development and Mapletree.

The tender process closed in March 2022.

Located at 31 Exeter Road, Comcentre has been Singtel’s headquarters since 1979 and occupies a site area of 19,252.6 square metres (sq m).

Upon its estimated completion in 2028, the new development is expected to have a total gross floor area of over 110,000 sq m, comprising Grade A office buildings, a retail component and Singtel’s existing Orchard Exchange that houses telecom infrastructure.

Singtel will occupy 30 per cent of the redeveloped space and remain as its anchor tenant. The remaining space will be leased out and serve as a recurring income stream to the telco.

Group chief executive Yuen Kuan Moon expects the redevelopment of Comcentre to strengthen Singtel’s financial position, being part of the group’s capital recycling strategy to unlock the latent value of its assets such that proceeds may be invested in growth areas with the potential to achieve higher returns.

“We look forward to partnering Lendlease to create a lush green oasis in the heart of Orchard Road. With its unparalleled location in the centre of Singapore’s famous shopping belt with a modern urban design, smart workplace features and commanding presence, Comcentre will be an attractive location for progressive companies seeking a prestigious ‘deep green’ business address,” said Yuen.

Shares of Singtel closed S$0.06 or 2.3 per cent lower at S$2.59 on Tuesday.