June 11, 2008

18th floor of Peninsula Plaza sold for $15m

By Joyce Teo

THE 18th floor of Peninsula Plaza near City Hall has been sold to a Taiwanese trading company for $14.9 million.

The price works out to $1,750 per sq ft (psf) of strata area. This is just below the last sale in the 999-year leasehold building - a single 1,485 sq ft office unit that went for $1,800 psf in January.

It is also well below what the seller Novelty Department Store, part of the Novelty Group, wanted - $17.5 million or $2,050 psf of strata area.

The six units have a total floor of about 8,500 sq ft and were put on the market in early March through an expression of interest exercise.

Rising rents here prompted the buyer, which has not been named, to buy the floor, said marketing agent Shaun Poh, a senior director at DTZ.

The firm will occupy two or three of the units when the tenancies expire in a few months.

The six units are tenanted at about $4 psf, but rents in the building have risen to as much as $8 psf so the firm can look forward to a better return when the time comes to renew the other leases.

The market for strata-office units has remained fairly active, considering how quiet the residential market has become.

While office rent increases have started to moderate, rents in general are still supported by demand from expanding firms and tight supply.