New Reporter
06-07-23, 18:21
Union Investment puts VisionCrest Commercial on market; guide price above S$470 million
Price works out to S$3,157 psf on net lettable area and S$3,038 psf on strata area for 11-storey freehold building along Penang Road
Jul 06, 2023
THE property unit of German asset manager Union Investment is putting on the market VisionCrest Commercial along Penang Road.
The guide price for the 11-storey predominantly office freehold building is in excess of S$470 million, reflecting S$3,157 per square foot (psf) on the net lettable area of 148,854 sq ft.
On the strata area of 154,711 sq ft, S$470 million works out to S$3,038 psf. The strata area comprises 149,652 sq ft of offices and 5,059 sq ft of retail space. The office space is on levels 2 to 11 (with one strata title per floor). The retail space, on level 1, comprises 11 strata units.
Union Investment Real Estate (UIRE) has appointed CBRE and JLL as exclusive joint advisers to market VisionCrest Commercial for sale. They will conduct an expression of interest exercise for the property, with submissions of offers expected around mid-August.
Diversified tenant base, 99% occupancy
The building, located between Dhoby Ghaut and Somerset MRT stations, has 99 per cent occupancy, providing an immediate source of stable, secure cash flow from a diversified tenant base to an incoming investor. Tenants include Manulife Financial Advisers, Puma Sports SEA Trading, conference organiser IBC Asia, The Coffee Bean & Tea Leaf, and Afton Chemical.
VisionCrest Commercial received the Temporary Occupation Permit in 2008 and was refurbished in 2018 and 2020. The building has 114 car parking spaces. Market watchers say the Orchard Road area’s position as an office location is set to receive a boost from the future redevelopment of Comcentre.
The Business Times understands that based on the current rental income from the building and a price of S$470 million, the net yield would be slightly north of 2.5 per cent.
VisionCrest Commercial is part of a mixed-use strata subdivided complex on a single land lot. The complex also includes the 265-unit VisionCrest Residence and the national monument House of Tan Yeok Nee. VisionCrest Commercial’s share value in the complex is about 49 per cent.
For UIRE, the intended sale of VisionCrest Commercial is part of its regular planning exercise to distribute returns to its investors and recycle capital within the Asia-Pacific region. It acquired the property in 2007 from the developer, a unit of Wing Tai.
Targeting UHNWIs, family offices, property funds
Ting Lim, head of capital markets for Singapore at JLL, said: “Prospective buyer profiles for this asset are expected to include ultra-high-net-worth individuals and family offices desiring to own a rare freehold asset in the Orchard Road office micro-market.
“We are seeing a continued influx of family office funds seeking opportunities in Singapore commercial property for wealth preservation. The palatable investment quantum for VisionCrest Commercial will also be attractive to a wide range of prospective investors from private wealth to institutional capital with value-add strategies.”
As VisionCrest Commercial is subdivided into 21 strata titles, this provides the prospective buyer with multiple exit strategies. This is a plus point, given the restrictions on the strata subdivision of commercial properties announced by the Urban Redevelopment Authority in March 2022.
Michael Tay, head of capital markets for Singapore at CBRE, said: “Despite the current high interest-rate environment, VisionCrest Commercial may still draw some property funds that can take a mid to longer-term view on their investment and/or who are able to execute an exit strategy via strata sale.”
Observers note that current borrowing costs are higher than office property yields. However, Tay said that “traditionally, buyers of freehold offices in Singapore have always prioritised the potential for capital appreciation and wealth preservation over property yields”.
The typical floor plate at VisionCrest Commercial is around 14,500 sq ft.
Buzz at Solitaire on Cecil and at 15 Scotts Road
The building comes on the market after the recent buzz for strata office floors at the freehold Solitaire on Cecil to be developed on the former PIL Building site. Strata sales began earlier this year and by mid-June, buyers were found for all 15 office floors and both restaurant units in the 20-storey development.
Except for level 6, which went for S$3,865 psf, the other 14 office floors at Solitaire on Cecil fetched above S$4,000 psf. The highest price of S$4,325 psf was for the penthouse office floor on level 20. Office floors in the project are mostly either 12,465 sq ft or 13,132 sq ft.
At the nine-storey freehold 15 Scotts Road, an older office building, the entire fourth level was transacted in October 2022 at S$3,568 psf on a strata area of 13,735 sq ft. The total price was S$49 million.
UIRE bought VisionCrest Commercial and House of Tan Yeok Nee for S$260 million in early 2007 from the Wing Tai unit. The apartments were not part of the deal.
In 2012, UIRE sold House of Tan Yeok Nee for S$60.8 million.
Wing Tai developed VisionCrest Commercial and VisionCrest Residence on the site of the former Cockpit Hotel and an open-air carpark that it acquired in 1996 from the late hotelier Teo Lay Swee. Also included in the transaction was House of Tan Yeok Nee.
https://www.businesstimes.com.sg/property/union-investment-puts-visioncrest-commercial-market-guide-price-above-s470-million
Price works out to S$3,157 psf on net lettable area and S$3,038 psf on strata area for 11-storey freehold building along Penang Road
Jul 06, 2023
THE property unit of German asset manager Union Investment is putting on the market VisionCrest Commercial along Penang Road.
The guide price for the 11-storey predominantly office freehold building is in excess of S$470 million, reflecting S$3,157 per square foot (psf) on the net lettable area of 148,854 sq ft.
On the strata area of 154,711 sq ft, S$470 million works out to S$3,038 psf. The strata area comprises 149,652 sq ft of offices and 5,059 sq ft of retail space. The office space is on levels 2 to 11 (with one strata title per floor). The retail space, on level 1, comprises 11 strata units.
Union Investment Real Estate (UIRE) has appointed CBRE and JLL as exclusive joint advisers to market VisionCrest Commercial for sale. They will conduct an expression of interest exercise for the property, with submissions of offers expected around mid-August.
Diversified tenant base, 99% occupancy
The building, located between Dhoby Ghaut and Somerset MRT stations, has 99 per cent occupancy, providing an immediate source of stable, secure cash flow from a diversified tenant base to an incoming investor. Tenants include Manulife Financial Advisers, Puma Sports SEA Trading, conference organiser IBC Asia, The Coffee Bean & Tea Leaf, and Afton Chemical.
VisionCrest Commercial received the Temporary Occupation Permit in 2008 and was refurbished in 2018 and 2020. The building has 114 car parking spaces. Market watchers say the Orchard Road area’s position as an office location is set to receive a boost from the future redevelopment of Comcentre.
The Business Times understands that based on the current rental income from the building and a price of S$470 million, the net yield would be slightly north of 2.5 per cent.
VisionCrest Commercial is part of a mixed-use strata subdivided complex on a single land lot. The complex also includes the 265-unit VisionCrest Residence and the national monument House of Tan Yeok Nee. VisionCrest Commercial’s share value in the complex is about 49 per cent.
For UIRE, the intended sale of VisionCrest Commercial is part of its regular planning exercise to distribute returns to its investors and recycle capital within the Asia-Pacific region. It acquired the property in 2007 from the developer, a unit of Wing Tai.
Targeting UHNWIs, family offices, property funds
Ting Lim, head of capital markets for Singapore at JLL, said: “Prospective buyer profiles for this asset are expected to include ultra-high-net-worth individuals and family offices desiring to own a rare freehold asset in the Orchard Road office micro-market.
“We are seeing a continued influx of family office funds seeking opportunities in Singapore commercial property for wealth preservation. The palatable investment quantum for VisionCrest Commercial will also be attractive to a wide range of prospective investors from private wealth to institutional capital with value-add strategies.”
As VisionCrest Commercial is subdivided into 21 strata titles, this provides the prospective buyer with multiple exit strategies. This is a plus point, given the restrictions on the strata subdivision of commercial properties announced by the Urban Redevelopment Authority in March 2022.
Michael Tay, head of capital markets for Singapore at CBRE, said: “Despite the current high interest-rate environment, VisionCrest Commercial may still draw some property funds that can take a mid to longer-term view on their investment and/or who are able to execute an exit strategy via strata sale.”
Observers note that current borrowing costs are higher than office property yields. However, Tay said that “traditionally, buyers of freehold offices in Singapore have always prioritised the potential for capital appreciation and wealth preservation over property yields”.
The typical floor plate at VisionCrest Commercial is around 14,500 sq ft.
Buzz at Solitaire on Cecil and at 15 Scotts Road
The building comes on the market after the recent buzz for strata office floors at the freehold Solitaire on Cecil to be developed on the former PIL Building site. Strata sales began earlier this year and by mid-June, buyers were found for all 15 office floors and both restaurant units in the 20-storey development.
Except for level 6, which went for S$3,865 psf, the other 14 office floors at Solitaire on Cecil fetched above S$4,000 psf. The highest price of S$4,325 psf was for the penthouse office floor on level 20. Office floors in the project are mostly either 12,465 sq ft or 13,132 sq ft.
At the nine-storey freehold 15 Scotts Road, an older office building, the entire fourth level was transacted in October 2022 at S$3,568 psf on a strata area of 13,735 sq ft. The total price was S$49 million.
UIRE bought VisionCrest Commercial and House of Tan Yeok Nee for S$260 million in early 2007 from the Wing Tai unit. The apartments were not part of the deal.
In 2012, UIRE sold House of Tan Yeok Nee for S$60.8 million.
Wing Tai developed VisionCrest Commercial and VisionCrest Residence on the site of the former Cockpit Hotel and an open-air carpark that it acquired in 1996 from the late hotelier Teo Lay Swee. Also included in the transaction was House of Tan Yeok Nee.
https://www.businesstimes.com.sg/property/union-investment-puts-visioncrest-commercial-market-guide-price-above-s470-million