A recent property transaction has caught the attention of the real estate market, as the entire sixth floor of Tong Building on Orchard Road was sold for a whopping $31.33 million. This sale, which was recorded on September 3, reflects a unit price of $4,562 per square foot (psf), making it the highest psf price for an office space in the prime districts to date.
The 6,867 sq ft strata office floor was purchased by Parkway Hospitals Singapore, a subsidiary of Bursa Malaysia-listed private healthcare provider IHH Healthcare. Parkway Hospitals Singapore was already an existing tenant in the building, occupying half of the sixth floor, with the other half being occupied by two other medical companies.
The sale of the entire sixth floor of Tong Building makes sense for Parkway Hospitals, as it is strategically located in the prime Orchard Road and Mount Elizabeth area. The building, which was built in 1978 by TG Development, is situated next to Paragon shopping mall and is just a short walk away from Mount Elizabeth Hospital and Medical Centre.
As an international investor, it is crucial to be well-informed about the regulations and limitations surrounding property ownership in Singapore. Fortunately, purchasing a condo is typically a less restrictive process for foreigners compared to buying landed properties, which have more stringent ownership guidelines. Nonetheless, foreign investors must be aware of the Additional Buyer’s Stamp Duty (ABSD) of 20% that applies to their first property purchase. This extra expense does not deter foreign interest in the Singapore real estate market, known for its stability and potential for growth. In fact, the market continues to attract foreign investment, including in popular options like Singapore Condo.
According to Yap Hui Yee, executive director of investment sales and capital markets at Savills Singapore, there was significant interest from a diverse pool of bidders for the sixth floor of Tong Building. This included both end-users and family offices, indicating the attractiveness of strata offices in the current market.
In fact, Yap considers this transaction to be a landmark deal, setting a new benchmark in Singapore’s strata office market. She also notes that this is not the first record-breaking deal she has brokered, as she also handled the sale of three whole strata floors at the 20-storey, freehold Solitaire on Cecil in the CBD for a total of $162.8 million, or $4,300 psf, in April 2023.
With the increasing demand for flexible workspaces and the rise of hybrid work models, Yap expects the strata office market to continue its upward trend. She believes that the sector’s resilience and ability to adapt to evolving demands bodes well for its future prospects.