Thai buyer pays record S$3,850 psf for top floor of Suntec Tower One

This is the highest on whole-floor basis for an office deal in Suntec City. But it was no deal at Bugis Junction Towers, a reflection of a two-tier office investment market

Oct 12, 2022

A TWO-TIER market seems to be developing for Singapore office investment sales: Even as some institutional investors are harbouring second thoughts about picking up office buildings at high prices set by owners amid uncertainties and a rising-interest-rate environment, cash-flush Asian investors continue to be drawn to strata office plays in the city state.

Suntec City, for example, continues to attract investors willing to pay record prices for whole-floor deals.

A Thai citizen is understood to be buying the top floor of the 44-storey Suntec Tower One for S$39.7 million, or S$3,850 per square foot (psf), on a strata area of 10,312 sq ft. The deal was inked last month. .

Market watchers say this is a fresh record psf price for a whole office floor at Suntec City, toppling two records set in recent months in Suntec Tower Two next door. Suntec City stands on land with 99-year leasehold tenure that began on Mar 1, 1989, leaving 65 years and 5 months left on the lease.

Meanwhile, over at Bugis Junction Towers, an expected sale fell through after potential buyer Sun Venture concluded its due diligence last month, The Business Times understands.

The recently renovated, 15-storey office tower above Bugis MRT station had been expected to transact at S$680 million, which works out to S$2,732 psf on net lettable area (NLA) of 248,853 sq ft.

Bugis Junction Towers is part of a mixed development that also includes the InterContinental Singapore and Bugis Junction mall. The site has about 67 years left on its lease.

In August, BT reported that Baring Private Equity Asia (BPEA) had dropped its plan to purchase Parkview Square, a 24-storey art deco office tower a stone’s throw from Bugis Junction Towers. BPEA was said to have been in exclusive due diligence for a potential purchase at around S$900 million. This would have worked out to almost S$2,700 psf on the NLA of 336,000 sq ft. The property is on a site with about 74 years left on the lease.

Galven Tan, deputy managing director of investment sales and capital markets at Savills Singapore, said: “The Singapore commercial investment sales scene is currently a two-tier market. The institutional pool of buyers who are driven by returns are currently on the sidelines, monitoring the market as it is affected by the increase in interest rates. On the other hand, the ultra-high-net-worth individuals and family offices view real estate as a hedge against inflation, and continue to buy choice commercial properties such as strata offices and shophouses.”

Suntec continues to see strong interest in its strata offices among investors; the reasons include the high quality of the office space and their recently upgraded office lobbies. “Moreover, the unobstructed views of Marina Bay and Kallang Basin are extremely attractive,” Tan added.

In the recent record psf deal in Suntec Tower One, a Singapore-incorporated company fully owned by Phucherlin Klongkitjakon is buying the top floor. Going by Internet searches, a person bearing the same name is listed as a board member and director of Phnom Penh-headquartered IQPS Trading; the company imports and distributes fast-moving consumer goods (FMCG) throughout Cambodia, such as still and sparkling water, carbonated soft drinks, wines, spirits and beers. She is described on the IQPS Trading website as a “Cambodian/Thai seasoned businesswoman with market presence in Cambodia, Thailand and China”, with “extensive managerial and ownership involvement in several industries, including financial services, import and distribution of FMCGs”. She is also on the management team of ANCO Brothers Group in Cambodia.

The office floor is being sold by a company owned by Wang Kwang Yu and his wife Kwee Lee Chien, daughter of Pontiac Land Group founder Henry Kwee. The floor is leased to the Qatar Embassy.

In August, the 31st floor of Suntec Tower Two changed hands at S$3,350 psf on a strata area of about 12,282 sq ft, which surpassed the roughly S$3,300 psf fetched for the floor directly below in June this year.

Level 30 was bought by a Singapore permanent resident (PR) of Chinese descent. Level 31 was acquired by a Singapore-incorporated company, the shareholders of which are citizens of China or Cambodia; none of them is a Singapore permanent resident.

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