Ravi Chandran
Fifteen strata offices at Peninsula Plaza located at 111 North Bridge Road, have been put up for sale via a Tender exercise by Cushman & Wakefield (C&W). C&W is the appointed exclusive marketing agent for the fifteen strata offices at Peninsula Plaza.
The fifteen strata offices at Peninsula Plaza can be sold en masse or on piecemeal basis in accordance with the units’ existing tenancies.
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Peninsula Plaza is situated on a rare 999-year leasehold plot in the heart of Singapore’s bustling Civic District — City Hall, surrounded by prominent buildings such as the St. Andrew’s Cathedral, National Gallery and The Supreme Court. It is a 30 storey mixed use building comprising a five-storey retail podium and a 24-storey office block and a car park. The prime site is easily accessible and is strategically located across from the City Hall MRT Interchange Station. Amenities are readily available a stone’s throw away at malls such as Funan, Raffles City and Capitol Piazza. It is also within walking distance to the Bras Basah MRT Station on the Circle Line.
The fifteen strata offices at Peninsula Plaza to be divested are located on the sixth floor with a combined strata area of 7,804 sq ft approximately. There are various sizes available for acquisition, starting from 549 sq ft.
Mr Shaun Poh, Executive Director of Capital Markets at Cushman & Wakefield, says “Strata offices in central locations are highly sought after since they are very limited in supply, especially those with 999-year leases such as Peninsula Plaza. Investors need not worry about a diminishing lease as Peninsula Plaza has a balance land tenure in excess of 809 years.”
Mr Poh also added that, “In recent years, the rentals in the Central Business District (CBD) have also crossed double digits, prompting Small and Medium Enterprises to invest in office spaces around areas such as City Hall or Bugis to operate their businesses”.
The indicative price for the fifteen strata offices at Peninsula Plaza is $2,255 per sq ft or $17.6 million for the acquisition for all fifteen units, within the price range of recently transacted units at Peninsula Plaza which hit $2,500 per sq ft earlier in April this year.
The Tender exercise for the fifteen strata offices at Peninsula Plaza closes on 25 September 2019 (Wednesday), at 3.00pm.
A recent research said that the office property vacancies in Singapore continue recovery as sales and rent prices continue upwards trend. The report by Colliers International said that office property vacancies continued to recover as sales prices and rents continued its upward trend, thanks to stronger demand for space mainly from technology and flexible workspace sectors, as well as a larger investment appetite for prime office assets.
Mr Paul Ho, Chief mortgage officer of iCompareLoan said, “office property vacancies will continue to recover as the market is acutely aware of the tight vacancy rate and muted future supply.” The office market, especially the Grade A and prime office segment should see keen competition in the coming months,” Mr Ho added.
Investment sales volume in the office sector surged in 2Q19 anchored by big ticket office investment deals. In the largest big ticket office investment deal of the quarter, AEW purchased Chevron House, currently undergoing asset enhancement works, for $1.0 billion from Oxley Holdings.
The second largest big ticket office investment deal saw South Korea’s National Pension Service acquiring a half stake in Frasers Tower for $982.5 million. This came after Frasers Commercial Trust declined to exercise its right of first refusal as the deal would not be yield accretive for its unit holders. There was also suburban office activity with Metro Holdings and Evia Real Estate buying 7 & 9 Tampines Grande for $395.0 million.
Commercial deals recorded $3.5 billion in sales, making up 52 per cent of the total real estate investment sales volume of $6.7 billion in 2Q2019, At $6.7 billion, total investment sales increased 49 per cent from the previous quarter, bringing the total 1H 2019 volume to $11.2 billion at the mid-point of 2019. The residential sector clocked $1.7 billion and the industrial sector $0.5 billion.
Analysts have predicted that the favourable interest rate environment with potential Fed rate cuts in the coming quarters should continue to boost interest in real estate investment.
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