TE Capital, LaSalle JV Sells Pair of Orchard Road Floors in Singapore

Just over a half-year after closing on the $331 million purchase of a commercial building in Singapore’s Orchard Road area, a joint venture of private equity shop TE Capital Partners and LaSalle Investment Management has sold a pair of floors in the repositioned project.

In a pair of transactions, the fifth and eighth floors of Visioncrest Orchard were sold to separate buyers, with the price for the upper floor exceeding S$4,000 ($3,068) per square foot and setting a new high water mark for strata-titled office assets in the city-state’s posh shopping district, according to government data and sources familiar with the transactions who spoke with Mingtiandi.

The office floors are the first to sell in the 11-storey commercial block on Penang Road, with the prices achieved rivaling Singapore’s central business district in value, as the Orchard Road area benefits from government efforts to rejuvenate the commercial strip.

A joint venture of TE Capital Partners and LaSalle has been busy upgrading the commercial block since closing on the acquisition in January, with the partners pointing to the project’s amenities, location and sustainability as selling points for investors and owner-occupiers.

Orchard Benchmark Established

The eighth floor, which spans 14,725 column-less square feet (1,368 square metres) sold for S$59,194,000, or around S$4,020 per square foot, according to Real Estate Analytics data based on official caveats. TE Capital representatives declined to comment on the transactions and LaSalle officials had not yet replied to inquiries from Mingtiandi by the time of publication.

The sale to an owner-occupier is said to have brokered by Gillian Chee, head of local advisory firm Global Impact Assets. Chee declined to comment when contacted by Mingtiandi. The first units in the building were reported to be the subject of due diligence by potential buyers in July.

Following the same floor plate as the upper level, the fifth storey has also sold, with the joint venture partners also having found buyers for retail units on the ground floor of the project.

The pricing for the freehold asset trades exceeds the S$3,790 per square foot which family office IMC Group paid to acquire the third floor of the Nomu building in the Orchard Road area in the third quarter of last year.

With freehold, strata-title office assets becoming short in supply, the Visioncrest Orchard transactions rank behind only the S$4,300 per square foot achieved at TE Capital and LaSalle’s Solitaire on Cecil project among deals in the past two years, according to agency figures.

Repositioning Progress

TE Capital Partners announced in November last year that, in a joint venture with LaSalle, it had agreed to purchase what was then Visioncrest Commercial for the equivalent of S$3,023 per square foot of net lettable area. The purchase of the asset at 103 Penang Road from Germany’s Union Investment Real Estate GmbH was the largest office transaction of 2023.

Since the acquisition closed, the new owners have been busy enhancing the property, including renovating the lobby, adding end of trip facilities and EV charging spots, adding solar treatments to the facade to improve energy efficiency and installing rooftop solar.

The office areas also benefit from smart features for automation, indoor air quality monitoring and water purification, according to marketing materials seen by Mingtiandi. Brokers pointed to the property’s access to amenities including tennis courts, and a swimming pool, as well as its parking facilities as adding value for owner-occupiers.

Orchard Road Rising

Located opposite a green space separating Penang Road from Orchard Road, VisionCrest benefits from government efforts to uplift the commercial district.

Beginning next year, the Dhoby Ghaut area near VisionCrest Orchard will undergo a series of upgrades, including creating a 500-metre walking street on Orchard Road from Buyong Road to Handy Road.

As part of this effort, Istana Park, which currently spans 1.3 hectares (3.2 acres), will be expanded to approximately three times its current size through integration with existing park areas including Dhoby Ghaut Green and the Penang Road Open Space.

The plan includes rerouting traffic to Penang Road, which will be transformed from a one-way to a two-way street in the area, benefitting occupiers in Visioncrest Orchard.

The project also had the advantage of being within walking distance of the Dhoby Ghaut and Somerset MRT stations, which are served by the North-South, North East and Circle lines. The Central Expressway (CTE) and Pan Island Expressway (PIE) are also within a few minutes’ drive.