An office floor in a commercial block within Singapore’s Chinatown area has changed hands for S$17.38 million ($13.2 million) as investors continue snap up bite-sized opportunities in the city’s office market.
Inter-premium Corporation, a Singapore-registered real estate firm, sold the 21st floor of the 25-storey Chinatown Point at 133 New Bridge Road in a deal that closed at the end of December, according to Joshua Giam, an associate director with the capital markets team of CBRE in Singapore. The identity of the buyer was not disclosed, but Giam said the asset will be held for investment.
“Amid sustained rate hikes and uncertainty in the global macroeconomic, investors and end users continue to remain keen to deploy capital here,” CBRE, which brokered the deal, said in a Linkedin post. “This deal illustrates their confidence in Singapore and our team’s expertise in the investment market.”
The transaction adds to a string of strata office deals in the Lion City over the past month, including the sale of a set of commercial units in the Southpoint building in Tanjong Pagar, which fetched an all-time-high S$3,000 price per square foot in a S$32.68 million transaction last week.
Joining Institutional Investors
With an area of 9,717 square feet (902.7 square metres), which can be subdivided, the investor paid the equivalent of S$1,788 per square foot for its slice of the property at the junction of New Bridge Road and Upper Cross Street near the Chinatown MRT station.
Located just south of Clarke Quay, Chinatown Point is an integrated development with office space on the 8th to 25th levels above a 6-floor retail podium. Built in 1993 and renovated over a decade ago, the commercial complex has an underground pedestrian link to the Chinatown MRT station, which serves both the Downtown and Northeast lines.
Sought for comment, CBRE’s Giam told Mingtiandi that the latest deal shows the Singapore office market’s resilience amid a cautious investment climate as it continues to attract demand from both investors and end users.
A unit of Perennial Holdings serves as the retail manager of Chinatown Point, with the developer controlled by Kuok Khoon Hong, a nephew of Kerry Properties founder Robert Kuok, until recently having indirectly held a 37.2 interest in the office portion of the property.
Pan Asia Realty Advisors, a fund invested by Mitsubishi Estate and CLSA Real Estate Partners, purchased the mall element of the complex, along with four strata office units, from a Perennial-led consortium around four years ago for S$520 million.
In the last three months of 2022 grade A office rents in Singapore’s CBD rose for the seventh straight quarter to S$11.70 per square foot per month, based on data from CBRE Research. During last year rents for grade A offices rose by an average of 8.3 percent compared to 2021, or more than double the rate of increase recorded a year earlier.
Strata Keeps its Charm
Singapore’s strata office segment has been posting record deals over the past year and property analysts are expecting the sector to attract more investment this year.
Two months before the record-breaking strata sale in the Southpoint building earlier in January, a company controlled by Indonesia’s Widjaja family in November booked a record deal with the sale of three strata office units on the sixth floor of the Thong Teck Building at 15 Scotts Road.
The 2,497 square foot office space was purchased by a Chinese investor for S$10 million, or S$4,028 per square foot, notching a new high water mark for the Orchard Road shopping district in terms of price per unit of area.
2022 was also a banner year for Suntec City which saw at least three record-breaking deals between June and October, the latest being the S$3,850 per square foot purchase by Thai national Phucherlin Klongkitjakon of the 44th floor of Suntec Tower One.
“Investors’ appetite for strata office space remained healthy, and demand for this asset class did not appear to waiver in the fourth quarter,” Knight Frank stated in a report this month. “Given the more palatable size and quantum, investments in the strata office market are expected to continue in the coming months.”
Note: This story has been updated to indicate that the seller of the Chinatown Point mall in 2019 was a consortium led by Perennial, rather than by the company acting alone. Mingtiandi regrets the error. The story has also been updated to show that Perennial no longer holds any stake in the complex.