Orchard Rd Office Unit Fetches $2,497 psf

Source : The Business Times, December 24, 2007

Previous deal in same building on higher floor done at $1,601 psf in April

The strata office market is still running hot. A first-storey freehold office unit at United House, behind Le Meridien Singapore Hotel in Orchard Road, went for $2,497 per square foot of strata area at a Colliers International auction last week.

The last transacted price in the development was $1,601 psf for a 710 sq ft unit on the fifth level in April this year.

However, the highest unit price for a strata office unit here appears to be $3,050 psf, at The Central, a 99-year leasehold development above Clarke Quay MRT Station. Developer Far East Organization is said to have sold the entire 21st level of one wing of its V-shape, 25-storey office tower for $40.7 million several months ago.

The space comprises units #21-89 to #21-99, adding up to a total strata area of 13,337 sq ft. BT understands the buyer is a shipping company.

The $3,050 psf surpassed the previous record, set in the same building, when Far East sold the entire 24th level in the same wing for $2,850 psf, also this year.

While The Central's mall has already opened, its office tower, and small office, home office (Soho) block are expected to be ready in the first half of next year.

In the Orchard Road area, unit #01-01 of United House was auctioned by Colliers on Dec 19 for $7.5 million. The road-fronting unit - with a strata area of 3,003 sq ft - is subdivided into two smaller units that have been leased out at a total monthly rent of $13,260, with the last lease expiring in October 2008.

This presents an opportunity for the property's new owner - understood to be a low-profile Singapore investment company - to enjoy a higher yield when the lease is renewed or a new tenant found.

Grace Ng, Colliers deputy managing director (agency and business services) and auctioneer, attributes the unit's appeal not just to current demand for offices but to United House's potential for a collective sale.

The strata office market in other parts of Singapore also continues to buzz. At Suntec City, units on the 23rd and 27th floors have changed hands at prices ranging from $2,250 psf to $2,313 psf lately, according to caveats captured by SISV Services' Realink system.

At International Plaza in Anson Road - another favourite for strata office investors - a unit on the 30th floor was sold for $1,586 psf in October.

Nearby, at Shenton House, a couple of adjoining units on the 15th storey changed hands last month at about $1,500 psf. A 10th floor unit at High Street Plaza was sold for $1,714 psf a few weeks ago.