A 15,683 sq ft office space in Orchard Road has been put up for sale via an expression of interest (EOI) for around $41.56 million ($2,650 psf), reported the Straits Times.
The property comprises an entire floor of 15 office units on the seventh floor of Somerset Tower, which forms part of TripleOne Somerset (pictured), a prime mixed-use project consisting of a retail podium and premium-grade office towers adjacent to Somerset MRT Station.
At present, the development is undergoing a $120 million refurbishment to incorporate medical suites and upgrade the retail space, as well as spruce up the office lobby and common areas.
According to CBRE, the property’s marketing agent, the renovation of the office space on the seventh floor is scheduled to be completed by May.
Moreover, the said office space is expected to see strong demand given the scarcity of this particular type of property, said Sammi Lim, CBRE’s Director for Capital Markets.
“There hasn’t been a launch of new strata office units and medical suites for sale in the Orchard Road precinct in over three decades.” Only resale units, usually in old buildings, are available and these are even offered at high prices due their limited supply, she noted.
For instance, a 7,330 sq ft office space in Orchard Towers was sold for $12.5 million ($1,705 psf) last July, while a 6,867 sq ft space in Tong Building changed hands for $25.5 million ($3,713 psf) last April. Both freehold properties were built in the 1970s.
Conversely, TripleOne Somerset has a lease of 99 years commencing from 19 February 1975. Among its tenants are Gucci, Bell & Ross, Samsonite and Bottega Veneta.
“With monthly office rents at TripleOne Somerset hovering in the range of $8 to $8.50 psf, gross rental yields are close to four percent, which is also attractive to investors,” Lim noted.
The EOI exercise will close on 7 April.