- Suntec City is one of Singapore's largest entertainment and dining hubs.
- The offices have been much sought after by investors from Hong Kong, China, and India.
- This sale could signal a change in the tide for commercial investment in Singapore.
Savills Singapore has recently announced the sale of an office unit at Suntec City Tower – one of Singapore’s largest shopping, dining and entertainment hubs – for $11.5 million.
Selected floors of the Suntec City offices are arguably the only strata floors in Singapore that offer unobstructed views of the city skyline, waterfront, Marina Bay district, Kallang River and Singapore Sports Hub.
Savills investment sales & capital markets director, Sophia Lim, says Suntec City offices have always been much sought after by investors, end-users, and family offices, especially those from Hong Kong, China, and India.
“We have observed strong renewed interest from these group of buyers following the successful completion of the asset enhancement works for Suntec City last year,” she said.
Lim says the aforementioned works included the upgrading of the entrance lobby, reception, concierge area, lift lobbies, and restrooms, further strengthening the value proposition of the office floors.
State of the Singapore investment market
Savills investment sales & capital markets managing director, Jeremy Lake, said the Singapore Investment market had been stagnating for more than a year.
According to Savills’ Q2 Investment Briefing, there had been a drop of 50.7% quarter-on-quarter (QoQ) to S$3.29 billion in transactional values of real estate investment sales for Q2 in 2023.
Across the sectors, there was a 9.8% QoQ decline in the investment sales of the residential segment to S$1.56 billion and a 77.9% QoQ drop in the commercial investment sales to S$940.7 million.
There are hopes the latest full-floor sale at Suntec City could signify a change in the fortunes of commercial investment in Singapore.
“Institutional buyers have been sitting on the sidelines watching the dramatic increase in interest rates and waiting for signs of a peak,” Lake said.
However, the exception to this has been some higher-yielding industrial and retail assets which have been more sought after and are more palatable because of the higher initial yields.
“While institutional buyers have been on the sidelines, private high-net-worth buyers have been much more active, with shop houses and strata offices being the flavour of the month,” he said.
“These buyers are less sensitive to higher interest rates and are playing the long game, knowing Singapore property prices will rise over time despite some near-term headwinds.”
