There is a surge in investments being made on office rentals in Singapore as is evident by many developments lately.
Two latest major deals prove towards this growing interest in office rentals – one which was made in Suntec City Singapore while another in Cecil Street’s The Octagon.
Five stories of office space were recently sold in Suntec City’s Tower One and another floor at the neighbouring Tower Two for an estimated price of S$160 million.
It is understood that the sale agreement was managed by ARA Asset Management and sold to Alpha Investment Partners which managed the fund.
When calculated on a per sq ft basis, the average selling price is believed to be $2,600. The total area measures 61,667 square feet.
The sale went through a transaction that consisted of shares of companies which own the office property.
Five floors of Suntec Tower One are leased to BASF, a German chemicals company. There is a total office space of 53,863 square feet that is stretched out on Levels 24, 25, 34, 35 and 36.
On the other hand, in Tower Two of Suntec City, the 4th floor measuring 7.804 square feet has been leased out to numerous tenants.
Both the towers of Suntec City have 45 storeys each and are built on a property that has a 99-year lease tenure which had started on 1st March, 1989. About 69 years of the lease remain.
The office spaces sold are part of a mega development project under Suntec City which is developed at the Marina Centre.
It consists of 5 office towers comprising of four 45 storeys and one 18 storeys. There is also a convention and exhibition centre along with a mall.
The deal between Alpha and ARA regarding the acquisition of office space is likely to see completion within the next two months.
A property investment brokerage and advisory firm called Sakal Real Estate Partners is said to have brokered the deal.
The ARA Asset Management company had acquired this office property in 2016 under 2 tranches for a total cost of $143.8 million. ARA acquired the 4th floor of Tower Two recently in July for $1858 per square feet amounting to 145 million dollars.
The 5 floors of Tower One was acquired at a per square feet rate of $2,400 amounting to $129.3 million under a sale and leaseback agreement signed with BASF.
In another development at Cecil Street’s traditional CBD or Central Business District, the Murdaya business family is increasing its presence by purchasing 3 storeys of a 25-storey freehold property called The Octagon.
Murdaya family owns the Central Cipta Murdaya, an important conglomerate of Indonesia.
According to latest developments, Murdaya family is finalising the deal of further acquiring three more storeys – 14, 15 and 17 which is spread over a total area of 18568 square feet.
The per square feet rate was finalised at $2,450 amounting to about 45.5 million dollars. The Indonesian conglomerate purchased the holdings from Oversea-Chinese Banking Corporation.
According to a statement issued by the bank, the 3 floors were part of the bank’s historical holdings and were no longer required for any current banking operations.
The transaction was brokered by Cushman and Wakefield.
The Murdaya family had only in last May spent 30.3 million dollars to acquire the 9th and 10th floor of The Octagon which means that they paid about $2,450 per square feet.
Murdaya family are the owners of the last couple of floors of the Octagon which is a 25-storey building.