Buxani-linked Parkway Investment to sell 14 strata office units at Parkway Centre for $29.3 mil
By Cecilia Chow
/ EdgeProp Singapore |
SINGAPORE (EDGEPROP) - A portfolio of 14 strata-titled office units at Parkway Centre has been offered for sale by private treaty. The units are across multiple floors — from the third to the 13th — and range from 732 to 1,356 sq ft. They have a combined strata area of 15,897 sq ft and a guide price of $29.3 million, which translates to $1,843 psf.
Of the 14 units, 13 are tenanted. Tenants include The Pilates Works, Ritz Dance Studios, Vistas Academy of Language & Arts and Hanbridge Institute, a private education institute.
One of the new tenants that just moved in is Vistas Academy of Language & Arts (Photo: Brilliance Capital)
Based on the purchase price, the buyer can expect gross yields of about 3%, says Sammi Lim, founder and executive director of Brilliance Capital, who is handling the portfolio sale.
“The buyer can retain some units for their use and lease the rest for long-term rental income,” Lim adds. She estimates that market rents for the strata office space at Parkway Centre are about $5.50 psf per month.
The units represent 13.35% of the share value under the management corporation strata title, which makes its owner a significant stakeholder in any collective sale attempt at Parkway Centre, Lim reckons.
One of the tenants on the fourth floor is The Pilates Works (Photo: Brilliance Capital)
In the heart of Marine Parade
Parkway Centre sits on a land area of 18,665 sq ft with a 99-year lease from 1981. Hence, it has 57 years remaining on its lease. The building was completed in 1984 and comprises three retail units on the ground floor and 107 office units across the second to 13th floors.
Over the years, Parkway Centre has developed into a hub for enrichment classes, from tuition centres to dance studios. The McDonald’s at the first level of Parkway Centre has been a popular meeting place for students, families and friends for over 30 years.
The McDonald’s outlet on the first level of Parkway Centre has been there for over 30 years (Photo: Brilliance Capital)
The building is well-located at No. 1 Marine Parade Central and right in the heart of Marine Parade. The Marine Parade Central Market and Food Centre is behind it, and the Parkway Parade shopping mall is directly in front. Parkway Centre is linked to the neighbouring multi-storey HDB carpark via a sheltered walkway on the second level. (Find HDB flats for rent or sale with our Singapore HDB directory)
It will be even more accessible when the Marine Parade MRT Station on the Thomson-East Coast Line opens next year, as one of the station’s exits is next to Parkway Centre.
The covered link bridge from Parkway Centre to the multi-storey HDB carpark next door (Photo: Brilliance Capital)
Large bulk purchase
The portfolio of 14 units for sale results from one of the biggest bulk purchase deals over a decade ago. It was in March 2012 when Singaporean investor Kishore Buxani, founder and CEO of Buxani Group, and Mukesh Valabhji, chairman of Seychelles-based family office Capital Management Group, jointly purchased 51 units at Parkway Centre for $53.38 million. The seller then was the Chiu family of Hong Kong’s Far East Consortium.
The 51 units were held under Parkway Investment Holdings and had a combined strata area of 51,191 sq ft. The purchase price translated to $1,043 psf. Within months of their purchase, Buxani began receiving unsolicited offers for their units. From September 2012, the joint-venture partners began to offload units in the portfolio at prices ranging from $1,600 to $1,820 psf.
The atrium of Parkway Centre (Photo: Brilliance Capital)
Back then, strata-titled commercial units were sought-after by investors who switched out of residential properties following the roll-out of the additional buyer’s stamp duty (ABSD) and seller’s stamp duty in the residential market in 2011. (Find Singapore commercial properties with our commercial directory)
A series of property cooling measures have ensued, with the latest round unleashed on April 27, 2023. ABSD was raised to 20% for Singaporean investors buying their second home and 30% for those buying their third or more residential property. Permanent residents buying their second residential property will have to pay 30% ABSD, and 35% for their third and subsequent purchases. Foreigners buying residential property must pay 60% ABSD, a doubling from 30% before.
Parkway Centre is a 13-storey commercial building with 107 strata office units from the second to 13th floor and three retail units on the first floor (Photo: Samuel Isaac Chua/EdgeProp Singapore)
Enquiries for purchases
Like before, Parkway Investment Holdings began receiving enquiries from potential buyers seeking to purchase individual or bulk units at Parkway Centre in recent months. Hence, the shareholders have decided to sell the remaining 14 office units, still held under Parkway Investment Holdings.
Based on caveats lodged, the latest transaction at Parkway Centre was in October 2020, when an 829 sq ft unit on the 13th floor changed hands for $1.202 million ($1,450 psf). Before that, a 1,356 sq ft office unit on the third floor was sold for $2.44 million ($1,800 psf) in July 2018.
Meanwhile, at Parkway Parade across the road, a 926 sq ft strata office unit on the 10th floor was sold for $1.695 million ($1,831 psf) in April 2022. Parkway Parade has a 99-year lease from 1979. Hence, it has a remaining lease of 55 years.
Parkway Centre is located at Marine Parade and just across the road from Parkway Parade (Source: EdgeProp Landlens)
According to Lim, the portfolio of units at Parkway Centre presents an opportunity for long-term capital appreciation and rental returns, especially when the Marine Parade MRT Station opens next year. She sees “significant interest in bulk purchases of strata commercial units” from family offices, ultra-high-net-worth individuals, corporates, and local and overseas private funds.
Strata commercial units have been sought-after over the years as the government has limited the future supply of such units in new developments, notes Lim. She adds that the asset class is gaining in popularity not just with investors but also end-users seeking to purchase such units for the long-term stability of their business.
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