Chinese Investor Buys Office Block in Singapore’s Chinatown For $70M

A Chinese investor has purchased an office block in Singapore’s Chinatown from Liberty Insurance Singapore for 23 percent below the property’s original asking price, as mid-size acquisitions by wealthy individuals play a growing role in the city-state’s investment market.

A holding company solely owned by a private individual named Zhang Nie paid S$92.2 million ($70 million) for Liberty House at 51 Club Street, according to a caveat lodged last week, with the Singapore resident having formerly served as an executive with a local office of mainland oil giant Sinopec, according to a report by Reuters.

Liberty Insurance Singapore offloaded its 28,876 square foot (2,683 square metre) head office near the city’s central business district, at a price nearly a quarter below the initial asking price of S$120 million when it was put on the market last October.

Market sources who spoke with Mingtiandi said the insurer continues to occupy the property, with the new owner expected to lease back the premises to Liberty until 1 February 2024. The transaction was first reported by the Business Times.

Value-Add Opportunity

Zhang is paying the equivalent of S$3,193 per square foot for the boutique office building which occupies a 999-year leasehold corner lot nestled within a cluster of shophouses. The property was renovated in 2011 and features a passenger lift, five car parking spots and a roof terrace with unobstructed views of the CBD.

Zhang previously spent five years heading the Singapore trading operations of Unipec, a trading arm of mainland refining giant China Petroleum & Chemical Corporation (Sinopec), before leaving the company in 2015 due to personal matters according to the Reuters report.

When the tender for the Club Street office opened in October, CBRE, its sole marketing agent, noted the asset presents value-add and repositioning opportunities to boost its value.

Clemence Lee, the property agency’s executive director of capital markets, said at that time that the building can house a rooftop bar or restaurant while the second to fifth floors can be converted into a boutique hotel or co-living space.

Representatives from CBRE and Liberty Insurance declined to comment.

Streamlining Global Operations

Located within 10-minutes’ walking distance of Telok Ayer, Chinatown and Tanjong Pagar MRT stations, Liberty House is in a neighbourhood known for dining and entertainment locations.

Liberty Insurance Singapore is part of the Boston-based Liberty Mutual Insurance Group which has presence in other parts of Asia Pacific including mainland China, as well as the Americas and Europe.

In January, Bloomberg reported that the insurance giant is considering selling its businesses in non-core markets, including a potential sale of its Latin America operations that could be worth as much as $1 billion. In November last year, Liberty Mutual was reported to be exploring potential sale of its businesses in Spain, Portugal and Ireland.

Slow Start 2023

Liberty House adds to a string of mid-size commercial assets snapped up by deep-pocketed high net worth individuals in Singapore since the start of the year even as institutional investors are staying on the sidelines due to high borrowing costs.

In January, an unnamed buyer picked up the 21st floor of Chinatown Point office tower – about 10 minutes’ walk from Liberty House – for S$17.38 million, which translates to S$1,788 per square foot of floor area.

That deal was announced shortly after a transaction record was set in the Southpoint building along Cantonment Road in Tanjong Pagar when its 10th and 11th floors changed hands for S$32.68 million, or the equivalent of S$3,000 per square foot.

In the first quarter, trades of properties across all sectors in Singapore plunged 61 percent year on year to S$4.2 billion from S$10.8 billion in the same three-month period a year earlier, according to an industry report by Knight Frank.

“Although rising interest rates and economic disruptions have resulted in a more cautious market, high-net-worth buyers are purchasing properties for capital preservation and long-term appreciation, as well as income generation,” Daniel Ding, head of the land and building division of Knight Frank’s Singapore capital markets team, said in the report.