A prime 1,593 sq ft strata office unit at Havelock II, situated at 2 Havelock Road, is set to go under the hammer at the next property auction conducted by SRI on September 25. This owner’s sale has a suggested price of $2.63 million, equivalent to a rate of $1,651 per square foot for the strata area, which includes an extra 11 sq ft of space.
The up for sale unit is a corner unit on the seventh floor, and it has been constructed to a regular design with facilities such as meeting rooms, a washroom, and an open work area. According to Mok Sze Sze, the managing partner of auctions at SRI, this corner unit receives an ample amount of natural light and is also equipped with an independent air conditioning system. The pictures of the unit depict the bare unit before it was outfitted for the present tenants.
Mok promised that the unit would be offered with the present tenancy that is valid till May 2025. The property’s current rental yield at the suggested price is 3.3%, as per Mok. She believes that the unit is even capable of generating an impressive gross rental yield of almost 6%. The present rental rates in the Havelock II complex have been witnessing a strengthening trend this year. The Urban Redevelopment Authority’s data shows that the median monthly rent for office spaces on Havelock Road was $5.88 psf in 1Q2024, then it rose to $7.00 psf in 2Q2024 and then to $7.64 psf in 3Q2024 (based on data at the time of September 17, 2024).
Given that the current median rental rate is $7.64 psf, the property has the potential to yield a gross rental return of 5.5% as per the suggested price. According to Mok, the unit has been attracting a lot of attention from both investors and those looking for self-use purposes.
The property is not subjected to any additional buyer’s stamp duty (ABSD) as it is a commercial unit. As such, even foreigners are eligible to place a bid for the unit. The Property has received a large interest from both owner-occupiers and investors, according to Mok.
Four office resale transactions have been recorded at Havelock II this year, and the average selling price for the unit comes $1,794 per square foot. The most expensive Havelock II office unit that was sold this year (in terms of psf rate) is a 721 sq ft unit on the fourth floor, which was sold for $1.5 million on August 29 ($2,080 per square foot). The cheapest Havelock II office unit was a 334 sq ft unit sold on July 26 for only $525,000 ($1,573 per square foot).
Havelock II is a seven-story mixed-use development that came into existence in the year 1983 with a 99-year lease. The building houses a four-story office tower on top of a three-story retail podium. The office component comprises of 94 strata units starting from 312 sq ft, while the retail podium has 151 retail and F&B units starting from 140 sq ft. The basement section of the building has a parking lot that can accommodate about 101 vehicles.
Due to the limited availability of land in Singapore, there is a strong demand for condos in the country. As a small island with a rapidly expanding population, Singapore is facing a shortage of land for development. This has resulted in strict land use regulations and a highly competitive real estate market, causing property prices to continuously rise. As a result, investing in real estate, particularly condos, has become a profitable opportunity with the potential for capital appreciation. This trend is evident in various Singapore projects, making it a lucrative option for investors.
Havelock II was earlier known as 2HR before Guthrie GTS bought it for $282.88 million in 2013. It was rebranded in the year 2016 following a $40 million upgrade. The site is about 400 meters away from Clarke Quay MRT Station and Chinatown Interchange, giving it easy connectivity to the North East and Downtown Lines. A few of the nearby buildings include the Ministry of Manpower, the Family Justice Courts, and the recently rebranded Park Regis by Prince Singapore hotel. Other attractions that are just a short distance away include the Hong Lim Market and Food Center and People’s Park Center.
The seller who bought the unit from the developer in September 2014 for $3.35 million has also put in months of effort to ready it for the auction. He hopes to make a profit on the unit, given that it is currently priced at $1,651 psf, below the median of $1,794 psf fetched by the four resale office transactions at Havelock II this year.
At the time of writing, the seller has received several inquiries from interested parties, including investors and owner-occupiers. The seller believes that the office unit can command a higher rental of $7.64 psf per month if the rental is determined by current market rates, which would give a gross rental return of 5.5% with the guide price of $1,651 psf.
The commercial office is not subjected to any additional buyer’s stamp duty (ABSD) as it is meant for commercial purposes. It also means that foreigners can participate in the auction. The profit generated from commercial office properties is usually higher than residential properties. For instance, if the buyer purchases a unit for $2.63 million during the auction, it yields a profit of 3.3%. However, if the buyer can find a tenant and lease the property at the current market rate, it can give an impressive gross return of nearly 6%.
Havelock II is a seven-floor mixed-use development located in District 1. It was constructed in 1983 and has a 99-year leasehold. It’s comprised of one four-floor office block and one three-floor retail podium with 94 units of strata offices and 151 units of retail and food & beverage units, respectively. There are 101 basement parking lots available for office unit owners, retail customers, and visitors who own or rent a unit at Havelock II.
Havelock II is strategically located near the Clarke Quay MRT Station and Chinatown Interchange. It also benefits residents within its proximity, such as staff working at the Ministry of Manpower Building and Family Justice Court. Other nearby amenities include People’s Park Centre, Hong Lim Market & Food Centre, and Al-Abrar Mosque.
The four office resale transactions recorded in Havelock II this year had an average selling price of $1,794 psf. According to Edgeprop, a 334-square feet office unit on the fourth floor was sold for $525,000 on 26 July 2014, it is the lowest psf-price transaction. On the other hand, a 721-square feet office unit on the fourth floor was sold for $1.5 million on 29 August 2014, it is the highest psf-price transaction. The median monthly rental rate for office space on Havelock Road had an upward trend since January this year. In 1Q2024, it opens at $5.88 psf, and it gradually climbs up to $7.64 psf in 3Q2024 as of 17 September 2024, based on URA data.
The property for sale is in the seventh floor of Havelock II can generate an impressive gross rental yield of 5.5% based on its current median monthly rental rate of $7.64 psf. The property’s monthly rental rate can fetch $12,156, which translates to $10,505 of annual rental income. Based on the guide price of $1,651 psf, the office unit costs $2.63 million.
The owner of this 1,593 sq ft strata office unit at Havelock II hopes to sell it through the next property auction conducted by SRI on September 25. This is an attractive owner’s sale, coming with a guide price of $2.63 million. With a total strata area of 1,593 sq ft, this equates to $1,651 psf.
Situated at 2 Havelock Road, the property on offer is a corner unit located on the seventh floor. This unit is efficiently laid out and comes fitted with meeting rooms, a washroom, and an open work area. According to Mok Sze Sze, who is the managing partner for auctions at SRI, this corner unit is blessed with plenty of natural light and boasts an independent air-conditioning system.
The property also comes with an accessory lot spanning 11 sq ft in the strata area. The photos of the unit in its present condition, before any ready-fitting works were carried out, have been provided.
The office property has drawn interest from both buyers and investors alike, according to Mok.
The median price for office resale transactions at Havelock II that took place so far this year is $1,794 psf. The highest price achieved was for a 721 sq ft unit on the fourth floor that sold for $1.5 million on August 29. The lowest price was for a 334 sq ft unit on the fourth level that changed hands on July 26 for $525,000.
Based on URA data, monthly office rentals for spaces along Havelock Road have been rising steadily since years’ beginning. A monthly median rental of $5.88 psf was recorded for 1Q2024, which rose to $7.00 psf for 2Q2024. This trend continued throughout 3Q2024, with the median monthly rental rate climbing to $7.64 psf as of September 17 this year.
Given the present median rental rate of $7.64 psf for Havelock II office spaces, the on-sale office unit is capable of generating an annual rental yield of 5.5% based on its guide price of $1,