Prime freehold retail space and two office floors for sale at The Octagon

Image credit: Cushman & Wakefield

A prime freehold ground floor retail space and two office floors at the Octagon with a total indicative price of $43 million.

Cushman & Wakefield, the sole marketing agent, which announced the bulk sale by tender at the Octagon located at 105 Cecil Street said, the tender exercise will close on 3 July 2018 (Wednesday) at 3.00pm.

The Octagon
Image credit: Cushman & Wakefield

The Octagon is a 25-storey prominent standalone office building with 2 levels of basement carpark sitting on a prime freehold plot in the heart of Singapore’s CBD. Strategically located at the junction of Boon Tat Street and Cecil Street within the Raffles Place office micro market, the site is within walking distance to the Raffles Place and Telok Ayer MRT stations.

Located on the 1st, 2nd and 4th floor, the ground floor retail space and two office floors at the Octagon have a total strata area of approx. 15,995 sq ft with the ground floor retail unit occupying 3,617 sq ft and the two upper office floors each has 6,189 sq ft. The ground floor unit at the Octagon is leased to a fitness centre while the two upper office floors are occupied by two separate childcare centres.

Mr. Shaun Poh, Executive Director of Capital Markets at Cushman & Wakefield, said, “We continue to see strong interest for freehold strata retail and office floors within CBD like the Octagon. The recent CBD incentive scheme announced at the launch of the URA Draft Master Plan has also encouraged the owners of the older office buildings to relook their options for their properties.”

Mr. Poh added, “Unlike the previous five strata floors that we have recently sold in the Octagon, the latest three floors are fully occupied and include the entire ground floor retail unit. Prime ground floor retail space in the core CBD are highly sought after and hardly available for sale.”

The total indicative price pf $43 million for the ground floor retail space and two office floors at the Octagon works out to be $3,500 psf for the ground floor retail unit and $2,450 psf for the two office floors.

The bulk sale by tender at the Octagon was announced after a recent report said that the retail leasing market in Singapore remains steady, but restrictions on hiring foreign labour are set to weigh on sentiment in the coming quarters.

The report by CBRE said that sporting goods retailers and gyms remained key drivers of leasing demand in Singapore. The report titled ‘Asia Pacific Retails Trends’, added that even with this trend, the retail leasing market’s rate of expansion has slowed in recent months.

Entertainment retailers such as children’s indoor activity park are displaying strong demand for large spaces in shopping malls, and F&B is reaching saturation in the retail leasing market said the report.

But nevertheless Q1 saw selected groups experimenting with new formats said the report. These include an online provider which opened a central kitchen for F&B retailers to reach a new catchment area. Cosmetic brands, led by Korean and western names, continue to utilise pop-up stores for new product launches. As for luxury retailers, their leasing demand was limited, but there were no cases of downsizing or store closures. The report warned that retailer sentiment, especially among labour intensive trades, will turn cautious in the coming quarters.

It added that new pipeline supply remains limited beyond this year in the retail leasing market.

The report noted that following trends in Singapore’s retail leasing market:

  • New restrictions on the hiring of foreign workers will negatively impact leasing demand from leabout intensive segments such as F&B.
  • The Strategic Development Incentive Scheme may prompt the renovation of older retail properties in the Orchard area.
  • On online grocery retailer received special dispensation to open a supermarket and F&B store in a warehouse this quarter.

The report presented the following selected leasing transactions:

Tenant Size (SQ FT GTA) Property Location
Decathlon Singapore Lab 53,820 Kallang Fringe
Library@HarbourFront 32,000 VivoCity Fringe
Don Don Donki 26,000 City Square Mall Suburban
SK-II Boutique Spa by Senze Salus 4,000 Raffles City Fringe

Source: CBRE Research

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Written by Ravi Chandran

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