VisionCrest Commercial Being Marketed With Guide Price Of Over S$470mil
SINGAPORE – VisionCrest Commercial, an 11-storey predominantly office property at Penang Road, is slated to be put up for sale with an indicative price of more than S$470 million, reported The Business Times on Thursday morning (6 July, SGT).
The guide price works out to S$3,157 psf based on the commercial property’s net leasable area (NLA) of 148,854 sq ft. But if based on its strata area, the indicative price translates to S$3,038 psf.
By strata area, VisionCrest Commercial consists of 5,059 sq ft of retail premises and 149,652 sq ft of office space. The retail premises are on the 1st floor and comprise 11 strata units, while the offices are on levels 2-11, with 1 strata title per floor.
The seller is the property arm of German asset manager Union Investment, Union Investment Real Estate (UIRE), which has appointed Jones Lang LaSalle (JLL) and CBRE as exclusive joint advisers to market the commercial property. The advisers are poised to hold an expression of interest exercise (EOI), with offer submissions expected by the middle of August 2023.
The Business Times has learnt that based on the asset’s present rental income, the guide price translates to a net yield of slightly above 2.5 percent.
Currently, VisionCrest Commercial is 99 percent occupied. Tenants include Afton Chemical, Puma Sports SEA Trading, Manulife Financial Advisers, The Coffee Bean & Tea Leaf, and conference organiser IBC Asia.
The building is part of a bigger complex, which includes the national monument House of Tan Yeok Nee and the 265-unit VisionCrest Residence. VisionCrest Commercial’s share value in the complex is around 49 percent.
Previously, UIRE acquired VisionCrest Commercial and House of Tan Yeok Nee for a total of S$260 million from its developer, a subsidiary of Wing Tai, in early-2007. VisionCrest Residence was not part of the transaction.
The predominantly office building, which is situated between the MRT stations of Somerset and Dhoby Ghaut, obtained its Temporary Occupation Permit (TOP) in 2008. Then in 2012, UIRE sold House of Tan Yeok Nee for S$60.8 million. Subsequently, VisionCrest Commercial was spruced up in 2018 and 2020.
“Prospective buyer profiles for this asset are expected to include ultra-high-net-worth individuals and family offices desiring to own a rare freehold asset in the Orchard Road office micro-market,” commented JLL Singapore’s Head of capital markets Ting Lim.
“We are seeing a continued influx of family office funds seeking opportunities in Singapore commercial property for wealth preservation. The palatable investment quantum for VisionCrest Commercial will also be attractive to a wide range of prospective investors from private wealth to institutional capital with value-add strategies.”
Given that VisionCrest Commercial is subdivided into 21 strata titles, this gives would-be buyers with multiple exit strategies. This is a plus point in light of the strata subdivision ban announced by the Urban Redevelopment Authority (URA) in March 2022.
“Despite the current high interest-rate environment, VisionCrest Commercial may still draw some property funds that can take a mid to longer-term view on their investment and/or who are able to execute an exit strategy via strata sale,” added Michael Tay, Head of capital markets for Singapore at CBRE.
Furthermore, analysts disclosed that the status of Orchard Road, where VisionCrest Commercial is located, as an office area is poised to get a boost from Comcentre’s upcoming redevelopment.