PGIM Real Estate to begin strata sales at 108 Robinson Road in Q1 2024

Citi Commercial Pte Ltd

RIDING on the strong demand for strata offices, PGIM Real Estate (PGIM RE) plans to embark on strata sales at 108 Robinson Road this quarter.

The 12-storey freehold office building underwent an extensive revamp that was completed in June 2023.

PGIM RE has already started leasing some of the lower office floors.

“Units will be compellingly priced relative to recent transactions in the area,” PGIM RE said, probably alluding to the above-S$4,000 psf at which most of the strata office floors at the freehold Solitaire on Cecil transacted last year.

David Fassbender, managing director and senior portfolio manager for Asia value add strategies at PGIM RE, said: “108 Robinson Road provides a unique opportunity for investors and owner-occupiers to acquire a newly refurbished, freehold office property in a prime CBD (Central Business District) location, at an attractive investment quantum.”

Market watchers highlighted a few other potential candidates that could jump on the strata office sales bandwagon – 55 Market Street, the new development on the Peace Centre/Peace Mansion site, and VisionCrest Commercial at Penang Road.

PGIM RE’s Fassbender said potential buyers of strata offices at 108 Robinson Road could leverage on the mid to long-term office rental upside and further capital appreciation in Singapore.

“Furthermore, the freehold tenure of the building will have strong appeal to discerning private wealth and family offices keen on long-term wealth preservation.”

The building has been subdivided into 11 strata units. Offices on Levels 3 to 12 have one strata title per floor. Most of these 10 office floors are about 4,800 sq ft each, with Levels 3 and 4 slightly smaller at 4,400 sq ft and 4,700 sq ft, respectively.

Levels 1 and 2 are a single strata unit of about 6,300 sq ft comprising around 1,000 sq ft of food and beverage (F&B) space and 5,300 sq ft of double-volume retail and office space. PGIM RE said it has seen “steady interest” for both spaces and is in discussions with tenants.

The double-volume space has garnered interest from prospects keen to capitalise on its prominent full-height frontage on Robinson Road.

The group has leased 30 per cent of the 10 strata office floors. “We have reserved the higher floors, as we expect interest during the strata sales process from owner-occupiers,” said PGIM RE.

Observers said the building does not have any car park space. PGIM, however, highlighted the property’s close proximity to two existing MRT stations – Tanjong Pagar and Telok Ayer – as well as the upcoming Shenton Way station. “There is also ample car parking space in the area,” it added.

PGIM RE is the real estate investment and financing business of PGIM, the global investment management business of US-based Prudential Financial.

Strata office sales up 85% in 2023

Savills Singapore’s analysis of URA Realis caveats data showed that strata office sales totalled about S$2.14 billion in 2023, up 85 per cent from 2022’s tally of S$1.15 billion. Major contributors to last year’s figure include the bulk sale of VisionCrest Commercial as well as sales of strata office floors at Solitaire on Cecil.

Strata office deals in December 2023 included the sale of the top floor of the 44-storey Suntec Tower 3, at slightly over S$36.2 million or S$3,513 psf on the strata area of 10,312 sq ft. JLL brokered the deal, but its senior director of capital markets for Singapore, Terry Wong, declined to comment on the transaction.

The Business Times understands that Suntec Real Estate Investment Trust sold the floor to a Singaporean family office that plans to use the space for its own occupation, although it might consider renting out any excess space.

“The strata office market has been gaining good traction, especially in well-maintained buildings with good specifications,” said JLL’s Wong. Besides local and foreign family offices, he also envisages demand from established, Singapore-headquartered companies.

Fresh supply could boost deals

One factor that could spur office strata deals this year is fresh supply coming to the market.

Word in the market is that Kajima is evaluating the possibility of doing strata sales at its 55 Market Street, a 16-storey, 999-year leasehold property. Kajima has been granted approval for the subdivision of the building into 17 strata units.

These include 13 strata office units – one per floor – on Levels 2 to 14. There is also a strata office unit on Level 15 and part of Level 16, as well as another on part of Level 16. The remaining two strata units, for restaurants, are in Basement 1 and on Level 1.

Over in Sophia Road, the Chip Eng Seng/SingHaiyi-led consortium that picked up Peace Centre/Peace Mansion via a collective sale in late-2021 has been granted planning approval for a mixed-use project, including two apartment blocks as well as a 13-storey commercial block with retail space in Basement 1 and on Levels 1 and 2, and offices from Levels 3 to 13.

The development is approved for strata subdivision into multiple units per floor for both the office and retail floors, said Michael Ng, executive director of CEL Development, part of the Chip Eng Seng group.

“The consortium is expected to retain the retail floors for long-term investment but could potentially sell strata office units, most of which will range from about 1,000 sq ft to 3,000 sq ft. We could go to the market around Q3 2024...

“We see a lack of supply of new strata office developments, especially for small to mid-sized units, which could appeal to owner-occupiers as well as investors,” he said.

All eyes are also on the TE Capital Partners, LaSalle Investment Management and Metro Holdings tie-up that is buying VisionCrest Commercial. The 11-storey freehold building comprises offices on Levels 2 to 11 (with one strata title per floor) and 11 strata retail units on Level 1.

The joint venture is expected to embark on substantial asset enhancement works designed to boost the building’s quality and sustainability, and wellness offerings, before potentially exiting the investment via strata sales.

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