http://www.straitstimes.com/archive/...-sale-20150319

Commercial building owners sub-dividing units for sale

Published on Mar 19, 2015 1:23 AM


OWNERS of commercial buildings such as Prudential Tower in Cecil Street are extracting more value from their investments by sub-dividing units and selling them.

Units at Prudential Tower are in the process of being split up by their new owners, who are believed to be looking to sell them at about $3,100 to $3,300 per sq ft (psf).

This would be a premium to the $512 million, or $2,316 psf, that the consortium led by KOP Limited paid for their 191/2 floors in the 30-storey building last May. Units at the building, which is fully tenanted, are being sub-divided according to tenancies.

While units were previously sized as half floor (5,102 or 5,952 sq ft) or full floor (about 12,000 sq ft), units on at least three floors will be sold at sizes from 635 sq ft to 2,013 sq ft.

Another buyer - who paid the consortium $2,750 psf for half a floor in October last year - is understood to be strata sub-dividing his unit as well.

The move at Prudential Tower is the latest in a string of strata sub-divisions of office space.

"This is the disguised way of flipping," said Mr Navin Bafna, PropNex associate team director and a co-founder of Up Academy, which trains agents in commercial properties.

Units at the 28-storey office tower GSH Plaza, also in Cecil Street, are set to be launched soon.

The new owners have carved up the building, formerly known as Equity Plaza, into 259 strata office units for sale. They are believed to be keeping the 21 retail units on the first two floors.

GSH Corporation's subsidiary, GSH Properties, boutique developer DB2 Group and logistics firm Vibrant Group paid $550 million, or $2,181 psf, for the tower last June. Units are being priced at $2,850 to $3,500 psf, with sizes from 480 sq ft to 1,700 sq ft.

Units at the 19-storey office tower Crown@Robinson, or the former Chow House, are also expected to go on sale soon. Cheque collection is ongoing for the 86 strata office units in Robinson Road, with a guide price believed to be $3,500 to $3,800 psf for units from 592 sq ft to 1,152 sq ft. An additional 5 per cent discount will be given during the launch.

The building was bought in 2010 for $101 million by a group led by WyWy Group founder Y. Y. Wong. A Malaysian buyer is believed to have expressed interest in two floors of the project, according to market rumours.

Owners of some floors of GB Building are also believed to be applying for permission to sub-divide units, which are now sized per floor.

The strata sub-division strategy started with International Plaza a few years ago, albeit on a far smaller scale, said Mr Bafna.

An owner of a 2,357 sq ft unit in the building, for example, could apply to divide it into two units of 1,367 sq ft and 990 sq ft, or 1,399 sq ft and 958 sq ft.

A 937 sq ft unit may also be divided into two units of 474 sq ft and 463 sq ft.

RENNIE WHANG