Three rarely available freehold strata office floors at The Octagon located at 105 Cecil Street have been put up for bulk sale by Cushman & Wakefield (C&W). C&W who is the appointed exclusive marketing agent for the freehold strata office floors said the sale via a Tender exercise will close on 1 November 2018 (Thursday) at 3 pm.
The Octagon is a 25-storey office building sitting on a prime freehold plot in the heart of the Central Business District. Strategically located at the junction of Boon Tat Street and Cecil Street within the Raffles Place office micro market, the site is within walking distance to the Raffles Place and Telok Ayer MRT stations.
Located on the 14th, 15th and 17th floor, the freehold strata office floors have a total strata area of approx. 18,567 sq ft.
Each of the strata office floor has a plate size of approximately 6,189 sq ft, ideal for mid-range space requirements. The Octagon has two levels of basement car parks for season parking.
Mr Shaun Poh, Executive Director of Capital Markets at Cushman & Wakefield, said: “The strata titled office market has certainly made a comeback with several strata titled office buildings such as Samsung Hub, Springleaf Tower and The Octagon, breaking their historical record prices in the recent transactions. In terms of rental outlook, Singapore office rents have been edging up for six consecutive quarters and are likely to continue its growth on the back of strong occupier demand and limited new supply over the next two years.”
Mr Poh added: “With the residential collective sale sites constrained by the latest cooling measures, the developers are likely to divert their attention to commercial and hotel sites. We expect strong interest for the Properties from a wide range of buyers including foreign investors, high net worth private investors and corporate occupiers due to its prime location in the CBD, the freehold tenure and limited number of strata office floors of this size for sale on the market.”
The indicative price for the three freehold strata office floors is $2,450 per sq ft or about $45.5 million for all three office floors.
The indicative price in line with the latest transaction within The Octagon which two lower strata office floors were sold at the same per square foot rate a few months ago. Recent transactions of nearby freehold/999-year strata office at Samsung Hub and Crown @ Robinson were contracted at above $3,500 and $3,100 per sq ft respectively. Given these comparables, the freehold strata office floors for sale by Tender present good value for long term investors.
The biggest gainers following the new property cooling measures is likely be owners of strata portfolio of offices and shophouses approved for commercial use. The property cooling measures affected almost all categories of buyers and is predicted to achieve its intended objectives of cooling demand and moderating price growth. One report said investors looking for alternatives to park their money in the wake of property cooling measures, would divert their attention to the strata office and shophouse markets as they are not subjected to this round of purchase or sales restrictions/encumbrances.
Paul Ho, the chief mortgage consultant at iCompareLoan said: “Properties such as the strata office which us up for sale by Tender may be bought under personal name, but total debt servicing Total Debt Servicing Ratio (TDSR) will apply on the individual’s income on such purchases. To buy a commercial or industrial property under company name, total debt servicing ratio TDSR also applies on the individual director’s income if the company is an investment holding company or an operating company that is loss-making or does not have sufficient cash flow to servicing the repayment.
“To buy a commercial or Industrial property under company name where the company is well established with an existing operating business with strong financials, TDSR may be waived on the individual. However director is usually required to become personal guarantors of the loan the company undertakes. Hence this may affect the director’s other purchases, such as for buying a residential property, due to the loading from the TDSR for guaranteeing a loan.
Some banks even advertise 100 to 120% loan. This is due to a combination of working capital as well as commercial/industrial property loan, but this only applies to company with strong cash flow position. Commercial property is different from residential property and the considerations are more complex and varied though the payoff may be worthwhile for investors.”
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