The purchase price of the eight strata lots amounted to $31.93 million and translates to just under $3,700 psf based on strata area, according to caveats lodged with URA Realis (Photo: Cushman & Wakefield)
SINGAPORE (EDGEPROP) - Real estate player Top Global has sold eight strata office lots out of a total of 23 that it owns at 15 Scotts, formerly known as Thong Teck Building.
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The eight strata lots occupy a total strata area of about 8,643 sq ft across the sixth and seventh floors of the nine-storey commercial building located at 15 Scotts Road.
The purchase price of the eight strata lots amounted to $31.93 million and translates to just under $3,700 psf based on strata area, according to caveats lodged with URA Realis.
“It was a collective purchase by several individual buyers, some of whom were high net worth investors and others were family offices,” says Shaun Poh, executive director of capital markets at Cushman & Wakefield, the exclusive marketing agent for the properties.
Some of the office units sold were tenanted, while others were vacant. “Not all were investors,” Poh notes. “Some bought with the intention of using the office units themselves. It was a mix of local and foreign buyers.”
Source: URA
15 Scotts is a freehold commercial building with a prominent frontage along Scotts Road, just off prime Orchard Road. The building underwent a comprehensive $15 million refurbishment that included a retrofit of the common areas and enhancement of the façade to a fully glazed curtain wall in 2013.
RSP Architects, which had been a long-term occupier of the building, was behind the asset enhancement works undertaken at 15 Scotts Road in 2013. After all, the late Albert Hong, founder of RSP Architects, was the owner of the 23 strata lots that were eventually sold to Top Global. Hong stepped down from his position as executive chairman of RSP Architects in 2017 and became non-executive chairman of the firm.
Hong had held the 23 strata lots at 15 Scotts via six special purpose vehicles (SPVs). In April 2019, the six SPVs were sold to Kenneth Low Si Ren, executive director of Allied Technologies. Low, in turn, sold the SPVs to Top Global in September 2019 for $170 million, according to the latter in a Singapore Exchange (SGX) announcement. Incidentally, Top Global is now fully privatised, having delisted from the SGX in August.
View from the seventh floor strata office at 15 Scotts (Photo: Cushman & Wakefield)
The purchases made Top Global a substantial stakeholder of the building, controlling a sizeable strata area of 57,000 sq ft and 54% of the share value, based on the management corporation strata title (MCST) of Jul 2019. Savills had placed the aggregate value of the units at $180 million back then.
Having sold eight strata office lots on Sept 21, Top Global still owns 15 lots: one strata retail lot on the ground floor and 14 strata office lots spread across the second, third, sixth, seventh and eighth floors. The remaining strata lots are now available for sale by private treaty via Cushman & Wakefield.
There is a wide spectrum of strata office lots to suit different appetites, from a petite 614 sq ft on the sixth floor to an entire floor plate of 22,227 sq ft on the second floor, points out Poh. Prices of the strata office lots range from $3,356 sq ft to $4,068 psf. The ground floor strata retail lot is listed at $6,611 psf covers the entire unit on the ground floor, he adds.
Poh: It’s very rare to find freehold strata office units in the prime Orchard Road area in District 9. It’s attractive to investors, especially Indonesians and those from North Asia who traditionally prefer freehold property in the prime Orchard Road area (Photo: Cushman & Wakefield)
Some investors may want to adopt a long-term view: After all, 15 Scotts was built sometime in the 1970s. It sits on a freehold site of 37,241 sq ft. Under the URA Master Plan 2019, it is zoned commercial with a plot ratio of 4.9. The current development has only utilised 70% of the maximum plot ratio under the Master Plan. “This presents great redevelopment potential,” says Poh. “Given that the surrounding buildings are zoned for commercial, residential or hotel use, there is a possibility of converting the site from its current use as an office into a mixed-use development, subject to approval from the relevant authorities.” (Find Singapore commercial properties with our commercial directory)
The current strata floor area of the entire building at 15 Scotts is 107,747 sq ft. An investor purchasing just the entire strata floor of 22,227 sq ft on the second level will own 20.6% of the strata area and 20.07% in terms of share value under the MCST. “That is a significant stake especially in any future collective sale opportunity,” notes Poh.
View of Scotts Road and Orchard Road from the eighth floor of 15 Scotts (Cushman & Wakefield)
What’s more, Orchard Road is undergoing a major revamp, as the various stakeholders are using the current lull in the retail and hospitality sector to revamp or even redevelop their properties. Several developments along Orchard Road are also exploring a collective sale — from Orchard Towers to Tanglin Shopping Centre and Far East Shopping Centre.
“It’s very rare to find freehold strata office units in the prime Orchard Road area in District 9,” says Poh. “It’s attractive to investors, especially Indonesians and those from North Asia who traditionally prefer freehold property in the prime Orchard Road area.”
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