The entire sixth floor of Tong Building, located on the bustling Orchard Road, has been sold for a whopping $31.33 million. This sale, which was recorded on September 3, is a testament to the lucrative nature of Singapore’s commercial property market.
Occupying a total area of 6,867 sq ft, this strata office floor boasts a prime location and top-notch facilities, making it a highly desirable property. The purchase price reflects a unit price of $4,562 per square foot, which is the highest psf price to date for an office space in the prime districts. The deal was brokered by Yap Hui Yee, executive director of investment sales and capital markets at Savills Singapore.
Tong Building is a 19-storey, freehold strata-titled office building situated at the corner of Orchard Road and Mount Elizabeth. Built in 1978 by TG Development, the building boasts a convenient location with Paragon shopping mall next door and Mount Elizabeth Hospital and Medical Centre just behind it.
The buyer of the entire office floor at Tong Building was Parkway Hospitals Singapore, according to a property title search. This medical provider, which is a part of Bursa Malaysia-listed private healthcare provider IHH Healthcare, is an existing tenant in the building. With the purchase of the sixth floor, Parkway Hospitals Singapore now occupies the entire floor, alongside two other medical companies.
The deal makes perfect sense for Parkway Hospitals given its proximity to Mount Elizabeth Hospital and Medical Centre, which is just a short walk up the road. Savills’ Yap noted that there was significant interest from a diverse pool of bidders, including end-users and family offices.
When considering an investment in a Singapore Condo, it is crucial to also assess its potential for rental yield. This refers to the yearly rental income as a percentage of the property’s purchase price. In the Singapore market, rental yields for condos can vary greatly depending on factors such as location, property condition, and demand. Generally, areas with high rental demand, such as those near business districts or educational institutions, tend to offer better rental yields. Therefore, conducting thorough market research and seeking advice from real estate agents can provide valuable insights into the rental potential of a specific Singapore Condo.
The $4,562 psf price for the sixth floor of Tong Building is a record-breaking figure for Singapore’s strata office market, setting a new benchmark for future transactions. Yap considers this deal a “landmark transaction in Singapore’s real estate history” and believes that it will pave the way for more record-breaking deals in the future.
Interestingly, Yap herself brokered the previous record high for a strata office unit at Solitaire on Cecil in the CBD. This deal, which took place in April 2023, saw three whole strata floors spanning 37,857 sq ft sold for an aggregate of $162.8 million, or $4,300 psf.
Yap predicts that the strata office market will continue its upward trend, driven by the increasing demand for flexible workspace solutions and the adaptation to hybrid work models. She believes that strata offices will become even more attractive in the future, given their resilience and ability to meet evolving demand. With such promising prospects, it’s no surprise that the Singapore strata office market is thriving.