Refurbished strata office units at International Plaza up for sale at $12m

by • February 15, 2019 • Commercial Property LoanComments (0)955

Refurbished strata office units located in heart of the CBD with the Tanjong Pagar MRT station at its doorstep is expected to seek core opportunities in a rising rental market.

Colliers International presented today a rare collection of six adjoining strata offices at International Plaza for sale via private treaty. The refurbished strata office units are available on a sale and leaseback scheme with immediate annual gross rental yield of 4.2% for at least five years.

Situated in the bustling central business district (CBD), International Plaza – a mixed development comprising residential apartments, offices, a retail podium and a wide variety of F&B options – offers prominent frontage to Anson Road and is well-served by public transport.

refurbished strata office units

Image credit: International Plaza

The refurbished strata office units, which are located on high floor, have a combined floor area of approximately 6,469 sq ft and a 99-year leasehold tenure with effect from 1970. They also enjoy highly visible lift lobby frontage and have an efficient and regular unit layout.

Mr. Steven Tan, Director, Capital Markets & Investment Services, Colliers International, said: “This is a rare opportunity to own adjoining strata offices in one of the most highly sought-after business locations in Singapore. The Tanjong Pagar precinct, a historically rich neighbourhood, has undergone significant transformation in recent years, becoming more vibrant, cosmopolitan and appealing.

“We expect the six office units to excite investors, given their excellent location and attributes, as well as the attractive immediate annual gross rental yield of 4.2% for at least five years while they are being leased to a reputable and established company.”

Strategically located above the Tanjong Pagar MRT station and minutes’ walk from the Telok Ayer MRT station, the refurbished strata office units enjoys easy access to the rest of Singapore via the East-West Line and the Downtown Line. The development is also well-served by major roads and expressways such as the Ayer Rajah Expressway and the Marina Coastal Expressway.

The guide price for the six refurbished strata office units has been set at $11.968 million or $1,850 per square foot (psf) based on floor area. This compares favourably against the average price of $1,895 psf achieved for 13 office space transactions at International Plaza over the last six months.

Mr Tan added, “We believe the six strata offices offered for sale will appeal to astute investors, who are looking to capitalise on the tight CBD office space supply situation in Singapore over the next few years and are keeping an eye on potential upside opportunities over the longer term, as the government’s plans to develop the nearby Greater Southern Waterfront unfold.”

Owing to the property’s commercial-use zoning, foreigners are eligible to purchase the office units. Furthermore, additional buyer’s stamp duty (ABSD) and seller’s stamp duty (SSD) are also not applicable.

Singapore office market recovery finds firmer footing

The biggest gainers following the 2018 property cooling measures were predicted to be strata-offices and shophouses approved for commercial use as they are deemed as attractive investments. Investors looking for alternatives to park their money could divert their attention to the strata office and shophouse markets as they are not subjected to this round property curbs.

The Singapore office market looks set to end 2018 on a high amid tightening vacancy and limited stock of new space over the next three years, said a recent study by Colliers International. The real estate services company said it particularly anticipates that Premium and Grade A office rents in the Central Business District (CBD) could rise by 14% for the full 2018. This would be a first double-digit annual growth since 2011 and the fastest pace of increase in the Singapore office market since 2010.

Tenant retention becoming a challenge amid a rising office property market, Colliers inaugural survey

Colliers’ Q3 2018 Office sector report showed that average CBD Premium and Grade A office rents rose 4.3% quarter-on-quarter (QOQ) to SGD9.20 per square foot per month (psf pm) in the three months to 30 September, following a 2.6% QOQ growth in Q2 2018. On a year-on-year (YOY) basis, average CBD Premium and Grade A rents increased by 15.2% in Q3. Strong headline rent growth and declining incentives probably underpinned the uplift in effective rents during the quarter, noted Colliers Research.

The report said that office supply drought over 2019-2021 should keep CBD Grade A vacancy tight, below the 10-year average of 6.2%, even after accounting for the impact of slowing net absorption in 2020 and 2021 in accordance with consensus forecasts of a global economic dampening.

How to Secure a Commercial Loan Quickly

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