According to local media earlier this month, Straits Trading Company is selling its office tower, Straits Trading Building, to Singapore-based Sun Venture Group for a price of slightly above S$2,800 per square foot (psf) which, at a net lettable area of about 159,000-plus sq ft, had worked out to a price tag of S$450 million for the 999-year leasehold building. The pricing of some S$2,800 psf would be the highest for an office block in six years since the record S$3,125 psf reached for 71 Robinson Road in April 2008, while it was still under construction.
According to the company, the sale is part of Straits Trading’s move to reallocate capital from its portfolio of investment properties which are high in quality but low in yield to “potentially higher return real estate opportunities”.
Straits Developments Private Limited (SDPL), a unit of Straits Trading, has undertaken to Sun Venture that when the deal is completed, the rent and service charge that the property’s tenants and licensees have to pay as at March 1, 2015, will not be less than S$1.5 million monthly. If the sum does fall short, SDPL will have to top up the difference.
Sun Venture is a real-estate developer and investor with a portfolio of commercial assets that include an office building at 50 Scotts Road, four floors at Samsung Hub, Westgate Tower and Paya Lebar Square.
SDPL currently occupies the office premises on the building’s 28th floor and will lease the office space from the building’s buyer from the date that the deal is completed, up to Dec 31, 2016, with a further one-year option for renewal.
The transaction, slated to be completed by Dec 18, 2014, is conditional on shareholders’ approval at an extraordinary general meeting, among other things.