55 Market St Office Bldg Sold For S$287mil
SINGAPORE – 55 Market Street, a mixed-use commercial property in Raffles Place, has been sold for sale for almost S$287 million, reported The Business Times on Wednesday morning (23 February, SGT).
The 999-year leasehold property consists of 15 levels of office space and 2 floors of retail premises in the basement and on the ground floor. It’s sited on a 6,575 sq ft land plot and the entire development has a net lettable area (NLA) of slightly over 83,000 sq ft, meaning the selling price translates to roughly S$3,450 psf.
The seller is AEW, a property investment manager based in the United States, while the buyer is an indirect wholly-owned Singapore-based property subsidiary of Tokyo-based Kajima Corporation. Cushman & Wakefield (C&W) is understood to have brokered the transaction.
Notably, AEW completed renovating the commercial property in early 2020 after buying it in 2018 from Frasers Commercial Trust for S$216.8 million, which works out to S$3,020 psf based on its NLA of 71,796 sq ft at the time.
People privy to the matter disclosed that 55 Market Street is mostly vacant, so Kajima’s immediate priority is seeking occupants. However, some market watchers reckon that later on, the buyer could consider an exit strategy through strata sales.
Under Master Plan 2019, the 55 Market Street commercial site has a 15.0 gross plot ratio, allowing for a maximum gross floor area (GFA) of almost 98,620 sq ft. Hence, it has around 7,500 sq ft of unutilized GFA based on the building’s present GFA of 91,124 sq ft.
The commercial property is close to the Raffles Place MRT interchange station, while Telok Ayer station is farther away. The sale of 55 Market Street is expected to be concluded soon.
Meanwhile, nearly S$4.9 billion of Singapore office properties changed hands in 2021 according to figures compiled by JLL. While this is up from the S$2.3 billion recorded in 2020, it is still lower than the S$7.6 billion witnessed in 2019 before the COVID-19 pandemic. Notably, JLL’s data covers deals costing at least S$5 million and whose office component account for 80 percent of its area.
The prospect of Singapore’s office investment market is rosy, with most investors looking to buy assets this year, noted Galven Tan, Deputy Managing Director of investment sales and capital markets at Savills Singapore.
“There is potentially an under supply of office space due to low vacancy rates and tight new construction pipeline. The impact of work from home may be mitigated due to de-densification and the desire not to share desks.”
“We expect more office deal flow this year with a few private-equity funds ready to sell,” he added without elaborating.”
For instance, market chatter indicates that Gaw Capital has appointed Savills and CBRE to market Robinson 77 for sale, and the indicative price could be near S$3,000 psf.