Prospex owner selling whole building instead of strata sales

The Prospex, a nine-storey commercial building in Bugis, has been put up for sale by private real estate investment firm Pamfleet Group with an asking price of S$80 million or S$1,913 per square foot (psf) of gross floor area.

The move to sell the entire building through an expression of interest (EOI) rather than to stick to the original plan of selling strata units came amid recent sluggish office strata launches in the market.

Approvals have already been granted for strata sub-division for a combined area of 30,807 sq ft. The site spans about 5,264 sq ft with an approved gross floor area of 41,806 sq ft. But CBRE, the sole marketing agent for the property, said that the change of plans followed unsolicited requests for the purchase of the whole building from owner-occupiers and investors, both local and overseas.

According to CBRE executive director for investment properties Jeremy Lake, the response was strong from industries that included legal, design, corporate communications, IT, education, and finance.

Pamfleet group chief executive Andrew Moore said that since the completed facade was unveiled close to the property obtaining its temporary occupation permit, there has been strong interest from companies looking to use it as a corporate headquarters.

“The new buyer could also explore using part of the premises for owner-occupation and lease out the rest of the space, or even make use of the subdivided titles to sell some units individually,” Mr Moore said.

No space is leased out yet in the property, though Pamfleet said that there has been tenant interest to rent the office space at about S$8 psf, and the retail space could see rents in excess of S$25 psf.

After Pamfleet acquired The Prospex – its first property here – at S$45 million in April 2013, it made major alterations and additions to the building to achieve the current modern look. The renovations were completed last month and the EOI closes on Oct 23. The 99-year leasehold property has a balance tenure of 58 years. It has two levels of retail podium and is located at the intersection of Victoria Street and Middle Road, hence boasts high visibility and proximity to the Bugis MRT station. It is near the Bugis Junction, the InterContinental Hotel, the National Library and integrated developments South Beach and DUO.

Mr Lake noted that all CBD buildings transactions over the past year have been in excess of S$200 million, making this property in Bugis a “valued opportunity to purchase a commercial building in the CBD at an attractive price”.

Elsewhere, owners of two adjacent buildings at Cecil Street – ICS Building (the former Aviva Building) and Cecil House – were said in July to be mulling putting up their properties for sale in view of the struggling strata-sales market, which has been in a decelerating mode.

Slowing rental growth, toppish prices, and competition for buyers have plagued the 259-unit GSH Plaza (the former Equity Plaza) in Raffles Place where some 60 units are said to be sold since April with 11 caveats lodged at a median price of S$3,082 psf, and the 86-unit Crown at Robinson (the former Chow House) at Shenton Way where eight caveats have been lodged at a median S$3,528 psf.

But Colliers International is expecting transactions to pick up in the second half, led by the release of new units in these two projects and possibly the launch of Woods Square in Woodlands. About 48 caveats were lodged for new strata-titled office sales in the second quarter, up from eight caveats in the first quarter.

Source: The Business Times