Developer of new project on Cecil Street switches strategy to strata sales

THE developers of the new 20-storey freehold office project that will come up on the PIL Building site along Cecil Street have decided on strata sales of the development.

The TE Capital Partners and LaSalle Investment Management tie-up behind the Solitaire On Cecil project was earlier contemplating a forward sale of the entire asset.

However, it recently appointed five property agencies – Savills, CBRE, Cushman & Wakefield, SRI and Huttons – to market the property on a strata-titled basis instead.

The agents have been gathering interest for an initial four office floors. These are priced between S$47.74 million for level 5 (reflecting S$3,830 per square foot on a net saleable area of 12,465 sq ft) and S$54.89 million for level 15 (translating to S$4,180 psf based on its 13,132 sq ft area). Buyers will make progress payments based on the stages of the project’s development.

On an absolute price basis, the strata floors are a more bite-sized offering and easier to sell, compared with finding a buyer for the entire development with a total saleable area of about 191,800 sq ft. In September, The Business Times reported that the S$4,000 psf price that the joint venture, Solitaire Cecil, was eyeing on an en bloc basis would amount to more than S$760 million.

Singapore recently restricted strata subdivision of commercial properties in certain parts of the Central Area. This will mean that the supply for strata-titled offices will remain limited. But as reported by BT earlier, the Urban Redevelopment Authority’s (URA) written permission for the Solitaire on Cecil project granted in July indicates that the development may be strata subdivided.

Solitaire On Cecil will have 15 office floors ranging from about 11,238 sq ft to 13,487 sq ft.

Of these, six levels have one strata title per floor. The other nine office floors are further strata subdivided into eight smaller units per floor, but BT understands the plan is to sell these floors on a whole-floor basis as well.

Talk in the market is that interest has been encouraging from potential buyers – including corporates thinking of acquiring office space for their own use, as well as family offices and ultra high net worth individuals from Singapore and overseas (including Hong Kong and China). The rarity of freehold strata office play in the CBD would be a key investment attraction to potential buyers.

Solitaire On Cecil will have two restaurants at street level. When completed in 2026, the DP Architects-designed project will rise to 127 m, from the existing PIL Building’s height of 73 m. Solitaire Cecil, the joint venture held by funds managed by TE Capital Partners and LaSalle Investment Management, completed its purchase of PIL Building for S$323.8 million earlier this year.

Currently, there are fewer than 10 strata office buildings in the CBD with relatively big floor plates and good specifications. These include Samsung Hub, Prudential Tower, Springleaf Tower, SBF Center and Suntec City. Of these, only Samsung Hub is on a site with 999-year leasehold tenure while the other four are on 99-year sites.

Action at Springleaf Tower

Separately, at Springleaf Tower near Tanjong Pagar MRT station, levels 28 and 29 have been sold for about S$53.9 million or S$2,510 psf on a total strata area of 21,485 sq ft, according to URA Realis data.

The buyer is Esteel Enterprise, which owns a stake of about 61 per cent in mainboard-listed steel solutions provider BRC Asia . Esteel is controlled by You Zhenhua, a Singapore citizen.

The two floors, which have an internal staircase connection, are being sold by Union (2009), formerly known as Overseas Union Insurance.

Prosperity Steel United Singapore – another company that You controls – is understood to own at least three other floors at Springleaf Tower.

The 37-storey project is on a site with 99-year leasehold tenure starting Oct 1, 1996, leaving a balance of nearly 73 years.