Project at Robinson Rd priced from about $3,300psf, with medical suites from $3,800psf
The Business Times
January 23, 2013
FAR EAST Organisation's SBF Center has been receiving keen interest in the weeks leading up to its official launch, as investors continue to flock to the commercial sector in search of better deals.
BT understands that the office space is being marketed from about $3,300 psf of which those within the $3,300-$3,500 psf range have met with keen expression of interest; the medical suites are being marketed at between $3,800 and $4,000.
Specifically, some interest has been garnered for the whole floor plates (office), which are located around the middle floors.
The 99-year leasehold development features 197 offices - 192 smaller strata units ranging from 592-1,442 sq ft and 10,549 sq ft for five floor plate offices - and 48 medical suites of between 614 and 1,345 sq ft up for sale.
"I think the mood is now back towards real economy companies where demand for space is usually much smaller than that of the financial service sector. That should suit the strata segment better than those who build office buildings with floor plates in excess of 20,000 sq ft," observed Savills Singapore research head, Alan Cheong.
Lee Sze Teck, senior manager, training, research and consultancy, at DWG said that he expects keener interest in commercial projects as compared to industrial projects.
"SBF Center should see very healthy interest because strata office space, especially new ones, are not easy to find," he said.
That being said, industrial projects that have completed construction and have a ready tenant might see interest from investors. "The rental will be able to help them cover some of the mortgage instalments," said Mr Lee. "And, these investors are likely going in for the long term and so are less concerned about the sellers' stamp duty."
Mr Lee said he expects strata office space prices to climb as much as 10 per cent this year, while prices of retail space could remain flat due to uncertain market conditions.
Tan Boon Leong, executive director of industrial services at Colliers International said that those looking at longer term investment will continue to look to industrial properties.
"Sellers of the commercial/retail developments might increase their asking price by between 5 and 10 per cent - due to the heightened interest - resulting in a higher total quantum pricing.
"On the basis that all things being equal, and with rents for commercial/retail developments expected to stay relatively flat, this may result in an erosion of yield returns. Investors may then return to the industrial sector, where they find yield comparatively attractive, on top of the lower upfront cash outlay," he suggested.
Martin Koh | 86666 944 | R020968Z
Sherry Tang | 9844 4400 | R020241C
Senior Sales Director
DTZ Debenham Tie Leung (SEA) Pte Ltd (L3006301G)
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