A PORTFOLIO of 27 strata office units occupying four levels of 20 Cecil Street in the heart of Singapore’s central business district has been offered for sale.
The indicative price for the entire portfolio is S$100 million, which translates to an average price of S$3,143 per square foot based on a total strata area of about 31,979 square feet (sq ft). The strata area of each unit ranges from 786 sq ft to 2,303 sq ft. The 27 Grade A units can be purchased individually or in bulk, said joint marketing agents PropNex Singapore and Savills Singapore.
The individual unit price starts from around S$2.4 million.
Located on levels four, five, nine and 17 of the building, they are “generously spaced” and have regular, column-free layouts, the agents said in a joint statement on Tuesday. The units’ VRF (variable refrigerant flow) air-conditioning system also allows for independent unit operations.
As multiple units can be amalgamated into one large office space where the configuration can be tailored to meet different business needs, there may be keen interest from family offices, high net worth individuals, investors and end-users, said Yap Hui Yee, Savills Singapore’s director of investment sales and capital markets.
Investors will be attracted to the tenanted units with secure cash flow and strong tenant covenants, she added.
The deal size for strata offices can be custom-fit to match the investor’s budget, which is why it is a popular asset class for real-estate investors, according to Jeremy Lake, Savills Singapore’s managing director of investment sales and capital markets. “Typically, investors have the choice to buy individual units, multiple units, whole floors or even multiple floors.”
Moreover, compared with residential properties, the transaction costs for such deals are lower while the yields are higher, he added.
For 20 Cecil Street, buyers can expect net yields of about 3 per cent to 3.5 per cent; borrowing costs are in the range of 1.75 per cent, Mr Lake said. He noted that buying interest from investors in Singapore and Hong Kong has been returning in the last few months as they are “unfazed” by the work-from-home trend and recognise that high-quality strata offices in Raffles Place are hard to come by.
Likewise, PropNex Realty’s associate division director Navin Bafna said this is a “rare investment opportunity” for investors looking to buy Grade A offices within the 600-1,300 sq ft range. “It’s not often that you find individual Grade A strata offices for sale within the central business district, let alone units of this size.” He expects strong interest from both local and international investors.
The 20 Cecil Street mixed-use building has 28 storeys, comprising a 26-storey office tower atop a two-storey retail podium. It sits at the junction of Cecil Street and Church Street, and features a double-volume lobby entrance and a spacious pick-up and drop-off point, said the marketing agents. There is sheltered access to Raffles Place MRT interchange station, while Telok Ayer MRT station is a three-minute walk away.
PropNex Realty chief executive Ismail Gafoor noted that Singapore’s position as a competitive global business and financial hub continues to augur well for the commercial property sector. The city-state remains the preferred location for many global companies seeking to tap the region’s growth, he said.
By Fiona Lam, The Business Times / 14-Oct-2021