The rare offering of an entire floor of 15 office units in the premium Orchard Road area is expected to attract keen interest from investors.
All of the seventh floor of Somerset Tower in TripleOne Somerset has been put up for sale for about $41.56 million via an expression of interest.
The indicative price translates to about $2,650 psf for the 15,683 sq ft space, marketing agent CBRE told The Straits Times yesterday.
TripleOne Somerset - in Somerset Road - is a prime integrated development with two premium-grade office towers and a retail podium next to Somerset MRT station.
A $120 million renovation is under way to enhance the retail offerings, incorporate medical suites, and spruce up the office lobby and common areas.
The refurbishment work for the office space on the seventh floor will be completed in May, said CBRE.
The sale is expected to attract keen interest from investors, given the limited supply of this sort of property on the market. Ms Sammi Lim, director for capital markets at CBRE, said: "There hasn't been a launch of new strata office units and medical suites for sale in the Orchard Road precinct in over three decades." She said only resale units - typically in ageing buildings - are available and they are trading at premium prices due to scarcity.
A 6,867 sq ft space in Tong Building was sold at $25.5 million ($3,713 per square foot) last April, while another deal saw 7,330 sq ft of office space sold for $12.5 million ($1,705 psf) in Orchard Towers in July. Both freehold buildings were built in the 1970s.
TripleOne Somerset has a lease of 99 years, starting from Feb 19, 1975. Office tenants at the property include luxury fashion and lifestyle brands such as Gucci, Bottega Veneta, Samsonite and Bell & Ross.
CBRE noted rising interest from family office and property companies keen to take up space there, citing as an example Property Guru's relocation from its Novena office to TripleOne Somerset. "With monthly office rents at TripleOne Somerset hovering in the range of $8 to $8.50 psf, gross rental yields are close to 4 per cent, which is also attractive to investors," Ms Lim noted.
The expression of interest exercise closes on April 7.
Source: Straits Times, 23 Feb 2017