Strata office unit at Suntec Tower 1 hits $3,417 psf
By Cecilia Chow
/ EdgeProp Singapore |
SINGAPORE (EDGEPROP) - A 3,079 sq ft, strata-titled office unit on the 37th floor of Suntec Tower 1 of Suntec City changed hands recently for $10.52 million ($3,417 psf) in August. In terms of price psf, it’s the highest since a similar-sized of- fice unit on the 43rd floor of the same tower changed hands for $10.6 million ($3,443 psf) 12 months ago. (See also: Two office units at Suntec City and Cecil Street up for sale)
The latest deal of $3,417 psf for the 37th floor of Suntec Tower 1 was brokered by Low Choon Sin, managing partner of SRI Capital Markets. The price achieved translates to a capital gain of 44% over just two years as the seller had purchased the unit in March 2019 for $7.3 mil- lion ($2,3470 psf).
The seller had purchased an adjacent 2,196 sq ft office unit for $5.2 million ($2,370 psf) at the same time as the other unit two years ago. This smaller unit is also available for sale.
Low: Suntec City has its own base, and it has attributes that other strata office towers in the CBD do not have, especially unblocked views of Marina Bay from the high-floor units (Photo: Samuel Isaac Chua/EdgeProp Singapore)
“One of the draws of this high floor unit is its unblocked view of Marina Bay Sands,” says Low. “High floor units of such sizes are rarely available on the market." The other draw of Suntec City is the strong community of Chinese businesses that are located there, he adds. The common areas of the office towers at Suntec City were recently refurbished, bringing it in line with other new Grade-A office towers.
Besides business occupiers buying for their own use, strata office units are “an attractive choice for investors who are concerned about the ABSD [additional buyer’s stamp duty]”, says Low. “These investors are keen to invest in Singapore and there’s a lot of liquidity in the market.”
The total strata office transaction volume climbed steadily to 162 units in 1H2021, up from 134 in 2H2020 and 79 in 1H2020, according to Knight Frank’s recent research report on the strata commercial market.
The reception and common areas of the office towers at Suntec City have recently been refurbished (Photo: Samuel Isaac Chua/EdgeProp Singapore)
“While the number of strata offices sold in 1H2021 jumped 20.9% on a half-yearly basis, total transaction values increased 106.6% over the same period to $691.5 million (excluding the collective sale of Maxwell House),” says Knight Frank. This surpassed all previous half-yearly transaction values that hovered below $600 million since 1H2015.
Many of the larger quantum sales took place in 2Q2021, with 81 strata office deals worth $454 million recorded for the three months from April to June. This was up from $237.5 million in 1Q2021 for the same number of units. Four of the top five biggest transactions by price quantum were done in 2Q2021, adds Knight Frank. The biggest deal was for an entire strata floor of 13,111 sq ft on the ninth level of Samsung Hub, which was purchased by construction group Lee Kim Tah for $53.1 million in May. It translates to $4,050 psf, which is a new high in terms of psf price for the 999-year leasehold, 30-storey office tower at Church Street in the CBD.
When it comes to Grade-A strata office space in the CBD, there aren’t many for sale, notes SRI’s Low. Besides Samsung Hub, the other is Prudential Tower at Cecil Street, where the last transaction was for a 1,625 sq ft, strata office unit on the 24th floor that fetched $5.36 million ($3,299 psf) in November 2019. The 52-storey Prudential Tower has a 99-year lease from 1996. At Springleaf Tower on Anson Road, only entire strata floors of about 10,000 sq ft are available for sale. The latest transaction was for a 22nd floor, 10,742 sq ft unit, that changed hands for $23.5 million ($2,188 psf) in November 2020. The 37-storey Springleaf Tower has a 99-year lease from 1996 too.
The lift lobby and common area of one of the office towers that had a makeover recently (Photo: Samuel Isaac Chua/EdgeProp Singapore)
Of the five office towers at Suntec City, only three (Suntec Towers One, Two and Three) have strata office units for sale. Four of the office towers have 40 storeys each while Suntec Tower Five has 18 storeys. The office towers have a 99-year lease starting from 1989. They are linked to the 880,000 sq ft Suntec Mall as well as the Suntec Singapore Convention & Exhibition Centre, with 450,000 sq ft of customisable event space. The mall and convention centre is linked to the City Hall MRT station (an interchange on the North-South and East-West Lines), Esplanade MRT station on the Circle Line and Promenade MRT station (an interchange for the Circle and Downtown Lines). Suntec City, one of the largest integrated developments in Singapore, was developed by a consortium of Hong Kong tycoons, and completed in phases between 1995 and 1997. It is still the largest asset within Suntec REIT’s portfolio today.
“Suntec City has its own fan base,” notes Low. “One of its main attractions for occupiers and investors is the unblocked views of Marina Bay from the high floors — something which the strata office towers in the CBD may not have,” he adds
Check out the latest listings near Suntec Tower 1, Suntec City, Samsung Hub, Prudential Tower, Springleaf Tower, City Hall MRT station, Esplanade MRT station, Promenade MRT station
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