List Sotheby’s International Realty (List SIR) announced that a prime office space in Springleaf Tower is up for sale at $28.8 million. The 10,572 sq ft prime office space is on a high floor at the 22nd floor with an obstructed sea view.
List SIR said that the fully fitted office space at Springleaf Tower comes with a $600,000 renovation.
Springleaf Tower is a 37-storey, 165 m (541 ft) office and residential skyscraper located in the central business district of Singapore located on 3 Anson Road and near Prince Edward Road, The development is in the zone of Shenton Way and Tanjong Pagar near other skyscrapers, such as 8 Shenton Way, MAS Building, International Plaza, and Anson Centre, all of which are roughly 100 metres away. It is a Grade A office building.
Springleaf Tower was completed in 2002. Firms involved in the development include CapitaLand Commercial Limited, CapitaLand Limited, Benson Global, and DTZ Debenham Tie Leung (South East Asia) Private Limited.
However, the Springleaf Tower’s construction was not smooth. In the late 1990s, the developer of the building, a subsidiary of the now defunct Ban Hin Leong Group, ran into financial problems. It was unable to pay its contractors for the completion of the 37-storey building. This led to the UOB Case.
The Ban Hin Leong Group suggested that one of the contractors, Yongnam Holdings, purchase a floor, and that it set off the value of its work against the sale price of the floor. It was agreed to by United Overseas Bank (UOB), who was the mortgagee.
However, after Yongnam completed the work, UOB refused to release its mortgage. UOB said that it did not encourage or endorse the barter arrangement and later foreclosed on the building. Yongnam then sued UOB to protect its interest. UOB subsequently lost the case, and was asked to cede ownership of the floor to Yongnam.
Twelve floors in Springleaf Tower were sold in January 2007 for S$134 million, bought by Macquarie Global Property Advisors.
Just a few months later, in October 2007, the same twelve floors were sold again, at $225 million. This equates an increase of almost 70 percent. It was bought by SEB Asset Management, part of German pension fund manager SEB.
Paul Ho, the chief mortgage consultant at iCompareLoan said: “Properties such as the prime office space in Springleaf Tower may be bought under personal name, but total debt servicing Total Debt Servicing Ratio (TDSR) will apply on the individual’s income on such purchases. To buy a commercial or industrial property under company name, total debt servicing ratio TDSR also applies on the individual director’s income if the company is an investment holding company or an operating company that is loss-making or does not have sufficient cash flow to servicing the repayment.”
He added: “To buy a commercial or industrial property under company name where the company is well established with an existing operating business with strong financials, TDSR may be waived on the individual. However director is usually required to become personal guarantors of the loan the company undertakes. Hence this may affect the director’s other purchases, such as for buying a residential property, due to the loading from the TDSR for guaranteeing a loan.”
The biggest gainers following the new property cooling measures is likely be owners of strata portfolio of offices and shophouses approved for commercial use. The property cooling measures affected almost all categories of buyers and is predicted to achieve its intended objectives of cooling demand and moderating price growth.
One report said investors looking for alternatives to park their money in the wake of property cooling measures, would divert their attention to the offices and shophouses markets as they are not subjected to this round of purchase or sales restrictions/encumbrances.
Mr Ho said that despite the property curbs introduced by the Government last year, Singapore is still an attractive residential market for investors.
Although the property market exuberance has been curbed to some extent with the property cooling measures introduced last year, Singapore as a property market investment destination still remains among the top – shoulder to shoulder – with other cities in the world like London, New York, Shanghai and Sydney.
“We have to be mindful that there is a lot of excess capital fluidity here and at 1.9 – 2 percent, Singapore has one of the lowest interest rates for home loans in the region,” he added.
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