An 11,216 sq ft whole floor strata office space on the 22nd floor of the 28-storey, 99-year leasehold Plus at 20 Cecil Street was sold for $35.22 million ($3,410 psf) in early August (Photo: PropNex)
In Singapore’s CBD this year, Solitaire on Cecil dominated strata office deals in 1H2023, with all the units sold within five months of its official launch in January. The 20-storey, freehold office building currently under construction on Cecil Street is a redevelopment of the former PIL Building purchased jointly by TE Capital Partners and LaSalle Investment Management for $323.8 million in January 2022.
Solitaire on Cecil was the main contributor to the 61 units sold in the Downtown Core Planning Area worth a total of $521.5 million, says Knight Frank in its 1H2023 strata report on Aug 2. “It’s a strong indication that the market has been starved of new strata office units,” says Mary Sai, executive director of capital markets at Knight Frank.
In 1H2023, there were 149 strata office transactions worth $652.9 million in sales, a 19.8% drop from the $814.1 million in 2H2022 when 160 transactions were done. Compared to 2H2022, the strata office market slowed in 1H2023, says the Knight Frank report.
Read also: Office unit at Raffles Place for sale at $18.8 mil
The average unit price of freehold strata office space increased by 20% to $3,746 psf in 1H2023 from $3,120 psf in 2H2022. Knight Frank attributes the increase in average unit price to Solitaire on Cecil, which sold out all its office units at an average of $4,239 psf or a total of $321.8 million, based on caveats lodged. Meanwhile, leasehold strata office space recorded a mere 0.2% drop in average price to $2,495 psf in 1H2023 from $2,499 psf in 1H2022.
Another office tower in the CBD near Solitaire on Cecil, the 28-storey Plus at 20 Cecil Street, launched strata units for sale in October 2021. The office tower is owned by a private fund under CapitaLand, which purchased it for over $500 million in September 2019. Located at the junction of Cecil Street and Church Street, the building has a 99-year lease from 1989. Hence, it has a remaining lease of 65 years.
The latest transaction at Plus was for an 11,216 sq ft whole floor on the 22nd level in early August. The unit fetched $35.22 million or $3,140 psf. The buyer is believed to be a Southeast Asian family office. PropNex brokered the deal. It is the first whole floor transaction at Plus, says Navin Bafna, associate branch director of PropNex, who is marketing Plus.
Only 10 whole strata office floors are available for sale since CapitaLand launched whole floors for sale earlier this year, according to Bafna. Before that, units were offered for sale on a strata basis with sizes from 570 sq ft to over 3,000 sq ft.
Interest in strata office units, especially in the CBD, picked up last year following the Urban Redevelopment Authority (URA) announcement in March 2022 that strata subdivision of commercial complexes or mixed-use developments with a commercial component will no longer be allowed in Central areas, which include Orchard Road and the CBD.
On Aug 15, Savills Singapore offered an entire floor on the 31st floor of Suntec Tower 1 office tower for sale. The 12,282 sq ft floorplate has three individual strata units ranging from 3,735 sq ft to 4,758 sq ft. All the units are tenanted. The office floor offers unobstructed views of the Marina Bay financial district, the CBD, Kallang Bay and Singapore Sports Hub. The guide price for the full floor is $43 million or $3,501 psf.
Read also: Freehold strata offices at 108 Robinson Road put for sale at $18.2 million
Suntec City is a fully integrated commercial development with five Grade-A office towers connected to a million sq ft shopping mall (the second largest in Singapore) and a convention and exhibition centre completed in the late 1990s. Asset enhancements to the office towers were completed last year, including upgrading of the entrance lobby, reception, concierge area, lift lobbies and restrooms. The complex has a 99-year lease from 1989 and has 65 years left.
Last year, several record-breaking deals took place at Suntec City. In September 2022, a 10,312 sq ft floorplate on the 44th floor of Suntec Tower 1 changed hands for a record price of $3,850 psf or $39.7 million. According to a property title search, the buyer is Diamond Tree, said to be linked to a Thai businessman.
Another big-ticket purchase at Suntec City was in August 2022, when a 12,282 sq ft unit on the 31st floor of Tower 2 was sold for $41.148 million or $3,350 psf. Based on a property title search, the buyer is believed to be Chinese and purchased via a company registered as Lu Lu Fa Holdings.
“Suntec City continues to be a favourite among investors and end-users, and the offices on the high floors are always sought after for its panoramic views,” says Sophia Lim, director of investment sales and capital markets at Savills Singapore.
“Buyers and investors have shown a strong preference for quality strata offices in locations with convenient access to MRT stations,” notes Knight Frank’s Sai. “Some of them are buying for their own use.” She expects to see a spillover of investors from residential to strata commercial space, especially foreign investors deterred by the cooling measures in late April and the amendments to the Residential Property Act in July requiring foreigners buying land and property with a ‘commercial and residential’ zoning to seek approval.