Ravi Chandran
GB Building strata office floor for sale offers a rare opportunity for premium Grade A office offering in the heart of CBD
Brilliance Capital and Savills Singapore announced on 22 October that they are are pleased to offer for sale an entire floor located on Level 7 of GB Building.
GB Building is situated at Singapore’s Central Business District (CBD) and in the heart of the Tanjong Pagar submarket. It has approximately 95 metres prominent road frontage along Cecil Street and McCallum Street. The building also enjoys seamless connectivity with fully sheltered access to Tanjong Pagar MRT Station.
Located on the 7th floor, the GB Building strata office floor for sale is tastefully renovated and a regular floor plate with column-free layout. The GB Building strata office floor area is approximately 5,425 sq ft and comes with an exclusive use of the lift lobby, pantry and restrooms.
The guide price for the GB Building strata office floor is $9.765 million, or approximately $1,800 per sq ft, and this sale offering will be sold on a vacant possession basis.
Ms Sammi Lim, Executive Director, Brilliance Capital Pte Ltd, said: “This offering is a good opportunity for an occupier or an investor to purchase a high-quality strata office. Due to its quality specifications and strategic location, GB Building consistently enjoys a high occupancy rate and the office floors are always tightly held by a very small number of owners. Against the backdrop of tight strata office supply in the CBD, we believe that this offering is a good opportunity for the purchaser.”
The Tanjong Pagar precinct has undergone exciting rejuvenation anchored by new mixed-uses developments, Grade A offices, luxury residential developments and hotels, such as Tanjong Pagar Centre, Frasers Tower and the upcoming former CPF Building and Afro Asia Building.
With the redevelopment of AXA Tower by a joint venture comprising Alibaba Group and a Perennial consortium, other new lifestyle and F&B offerings complement the commercial and residential elements, which this area is traditionally known for, transforming Tanjong Pagar into a vibrant live-work-play community in Singapore’s CBD.
Based on recent strata office transactions in the vicinity, such as Samsung Hub, SBF Centre, Crown at Robinson, which are transacted in the range of $3,000 psf, the price point for the GB Building strata office floor is a compelling and attractive one, proving to be a chance opportunity for purchaser.
Ms Yap Hui Yee, Director of Investment Sales and Capital Markets, Savills Singapore, said: “In addition to the ongoing rejuvenation, the government’s development plans for Tanjong Pagar as the gateway to the next waterfront city will have a growth effect on both capital and rental values of existing developments. Furthermore, the opportunity to find a premium grade strata office floor at less than S$10 million price tag in the prime CBD is extremely rare and hard to come by.”
Tanjong Pagar is a historic district located within the Central Business District in Singapore, straddling the Outram Planning Area and the Downtown Core under the Urban Redevelopment Authority’s urban planning zone
Office leasing activity came to a halt in the third quarter of 2020 despite the circuit breaker easing into Phase 2 in the middle of June. The pace of occupiers taking up space in the Grade A CBD area remains sluggish. Tenants with leases expiring in the immediate horizon are seeking short term renewals in the face of business uncertainty. Office space is under-utilised as work from home remains the default. As a result, firms are undertaking workplace strategy studies to determine their future office needs. In the immediate to short term, the market is expecting a fraction of space to be returned vacant when occupiers renew their leases.
Nevertheless, some vacated spaces are being taken up by other occupiers who are seizing the opportunity to lease prime space at more attractive rental rates. For instance, QBE Insurance is relocating to Guoco Tower and taking up 31,000 sf of space vacated by Grab, which is moving to one-north. In addition, Amazon is leasing 90,000 sf across three floors at Asia Square Tower 1 which Citi is giving up.
Grade A CBD rents continued to decline by 5.1 per cent quarter-on-quarter to $9.84 psf/month in Q3 2020 in line with the weak market sentiment amid the worst recession on record. Geopolitical tensions have nudged Chinese tech firms to pivot to Singapore, taking up office space in the city-state. ByteDance is planning to make Singapore its regional hub for its expansion into the rest of Asia and has applied for a license to operate a digital bank here.
Similarly, Tencent has also chosen Singapore as its hub for its growth in Asia and has plans to open a new office here. Another bright spot is the upcoming redevelopments of AXA Tower and Fuji Xerox Tower in 2021, which will displace 700,000 sf and 354,000 sf of office spaces respectively.
There were approximately 350,000 square feet of new leases and expansions in office spaces by tech firms since the start of the year, based on estimates. It is projected that the take up by tech firms will increase to 400,000 – 500,000 square feet in 2021.
The office market heads into the fourth quarter of 2020 with significant challenges. The prevalence of staff working from home is expected to remain widespread in the short to medium term. The office sector will be reshaped by the increase in the remote working trend due to structural impacts, which will impact the leasing demand in the next 12-18 months. In addition, there has been a rise in retrenchments due to the recession, with a number of banks and energy firms giving up space. The full-year rental change is still projected to be -10 per cent in 2020 with a further decline to be expected in 2021.
