An office building in downtown Singapore has sold to a mainland Chinese investor for more than S$210 million ($150 million), through acquisition of equity in the company that owns the freehold building near the city’s upscale Marina Bay commercial area.
Singaporean property tycoon Cheong Sim Lam sold 137 Cecil Street, which was formerly known as the Aviva building, to a buyer from Shanghai with the family name Zhou last month, according to local press reports.
The purchase of the downtown Singapore building is the third major real estate acquisition by a mainland investor into the island nation this year. With this deal, the inflow of mainland capital into the Singapore market now exceeds $633 million in 2015, according to Mingtiandi’s database of cross-border Chinese property deals.
Building Value Triples in Six Years
Cheong, whose family developed International Plaza in Singapore, originally had been asking S$220 million for the 12-storey building on Cecil Street, but is now said to have sold the office block for between S$210 to S$215 million, according to local media reports. An exact figure for the sale of the property, which is now called the ICS building, has not been revealed yet.
The building has a net lettable area of 6,525 square metres built on a 920 square metre site. Cheong acquired the office block in 2009 for a price estimated at S$65 million, which means the local investor has been able to triple the value of his investment in six years.
Chinese Investment in Singapore on the Rebound
Although the Cecil Street acquisition is said to be only the third real estate investment of over $100 million in value by a mainland Chinese buyer in Singapore this year, that number already surpasses 2014’s total, when only two deals of that scale were transacted.
In June of this year Hao Yuan Investment from China paid $357 million for a development site on Dundee Road in Singapore. Also during 2015, mainland industrial conglomerate the Nanshan Group reportedly bought an industrial building on the city’s Irving Road for $124 million.
Just a few years ago in 2013, Chinese investment into Singaporean real estate reached nearly $1.4 billion. Many mainland investors are now betting on the island nation’s property market by proxy by investing in residential projects in neighboring Johor Bahru, Malaysia.
In the past four years, Chinese developers including Country Garden Holdings, Greenland Group and China Vanke have invested more than $4 billion into projects in Johor Bahru, in the hope that Singaporean and mainland buyers will be attracted to the city’s low real estate prices and proximity to Singapore.