Indonesia’s Widjaja Family Marketing Commercial Floor in Singapore’s Orchard Area for $57M

Top Global has put a strata-titled office asset in Singapore up for sale at S$76 million ($57.1 million) as the company owned by Indonesia’s Widjaja family plans to completely exit the commercial building near the Orchard Road shopping strip.

The property investment firm owned by the family behind Indonesian conglomerate Sinar Mas Group has appointed Cushman & Wakefield to market the entire second level of the freehold building 15 Scotts at a price equivalent to S$3,419 per square foot, according to a statement on Tuesday.

Shaun Poh, executive director of capital markets at Cushman & Wakefield, said his firm expects the asset to garner strong interest from owner-occupiers and investors as the supply of freehold strata office assets on Orchard Road dwindles in the wake of recent government restrictions.

The 22,227 square foot (2,065 square metre) floor is Top Global’s last piece of the former Thong Teck Building after the company disposed of the majority of its 23-unit portfolio of space in the building over the past two and a half years.

Eyeing an Exit After Five Years

The second floor of the nine-storey development is currently leased to a child care centre, Kiddiwinkie Schoolhouse, with the lease expiring in the fourth quarter. Thanks to its large floor plate, which includes outdoor space, Poh said the asset also presents a repositioning opportunity which could attract higher value tenants like co-working operators.

“The opportunity presents a unique chance for investors and businesses looking to establish a presence in a highly coveted location,” Poh said. “With the current strata subdivision restriction in prime areas, we do not foresee any of the big floor plates with a single ownership to be released anytime soon.”

There will be no incoming supply of strata-titled offices in the Orchard area in the next three years after the government in 2022 restricted the strata subdivision of commercial properties in Singapore’s business hub, according to the property consultancy.

Should the asset change hands at the asking price, Top Global would be selling at a 15 percent markdown from the S$4,028 per square foot it achieved when it disposed of three units on the sixth floor to a Chinese investor in November 2022.

In July of last year the company made its most recent disposal in the building when it sold two retail units to jewellery shop House of Hung for S$31.08 million.

Top Global latest offering is also price 8 percent below the S$3,694 price per unit it recorded in its first disposal in the building in October 2021.

The company’s bid to exit 15 Scotts comes four years after it acquired the portfolio of strata units for S$170 million in 2019.

Sukmawati Widjaja, who also goes by her Chinese name, Oei Siu Hoa, took Top Global private in an August 2021 deal, and is the sister of Singaporean billionaire Oei Hong Leong. The eldest daughter of late Sinar Mas founder Eka Tjipta Widjaja, Sukmawati has served as vice chair of Sinar Mas Group since 1988.

Strata Garner Attention

Built in 1973, 15 Scotts sits opposite the Far East Plaza shopping centre and underwent a S$15 million refurbishment in 2015. Poh said October’s S$908 million sale of the Far East Shopping Centre, which is five minutes’ walk from 15 Scotts, should increase the property’s appeal to investors.

The expression of interest campaign for the property is set to close on 22 February.

Xian Yang Wong, head of research for Singapore at Cushman & Wakefield, said demand for strata office assets is underpinned by supply constraints and the long-term prospects for higher office rents in the city-state’s core areas.

“Family offices and high-net-worth individuals are still on the lookout for real estate opportunities for wealth preservation and diversification,” Wong said Tuesday. “While financing conditions remain tight, investment products of palatable quantum (less than $200 million) have continued to transact.”

Investors have paid record prices for Singapore strata office assets over the past two years, led by Solitaire on Cecil, a joint venture project between local fund manager TE Capital and LaSalle Investment Management, which sold all of its 15 strata office floors within three months of entering the market last year.

The partners achieved a record for a Singapore strata office floor when they sold the top floor of the project near Raffles Place for S$4,325 per square foot in April 2023.

One year ago, an investor paid S$3,000 per square foot for a set of strata units in the Southpoint building near Tanjong Pagar, setting a new record for the nearly 40-year old property.