(SINGAPORE) Hong Leong Group is understood to have sold freehold Prime Centre on Middle Road for $103 million or $1,415 per square foot based on existing net lettable area of about 72,800 sq ft.
The 16-storey building is about half-vacant but that should suit buyer ERC Holdings group just fine as the private commercial school operator is said to be planning to renovate the property for use as an educational hub and hotel.
The group's ERC Institute runs tourism and hospitality courses among its academic programmes. DTZ brokered the sale of Prime Centre through a private treaty deal.
Market watchers say it makes more sense for ERC to renovate the existing 18-year-old office block rather than to tear it down and redevelop the site since Prime Centre's existing gross floor area of 94,657 sq ft reflects a plot ratio of 4.69 on its site area of 20,162 sq ft - exceeding the 4.2 plot ratio allowed for the site under Master Plan 2008.
The site is zoned for commercial use. It has 73 car park lots.
The new premises will help ERC cater to its expansion programme. A year ago, the group picked up 60 units equivalent to about 90 per cent of the North Bridge Commercial Complex (opposite Bugis Junction) for $46 million. It has since spruced up the space and is using it for its headquarters as well as a campus for ERC Institute.
The price which ERC paid seller City Developments (the listed property arm of Hong Leong Group) for the 999-year leasehold asset worked out to about $1,194 psf based on strata area of 38,534 sq ft.
That deal was also brokered by DTZ. Other office building deals the property consulting group has brokered this year include Marina House ($148 million), Chow House ($101 million) and the next-door Corporate Office ($215 million).
DTZ has also brokered the sale of nine Singapore industrial properties this year for a total of nearly $366 million to Sabana Investment Properties (SIP), which is expected to list the syariah-compliant Sabana Reit by year-end.
Five of the properties are being sold by Freight Links Express Holdings.
DTZ was also instrumental in Freight Links' equity participation in SIP, which will be the real estate investment trust's manager.
About $4 billion worth of office investment sales is estimated to have been transacted so far this year.