CapitaLand Integrated Commercial Trust (CICT) has successfully sold its 21 Collyer Quay office building in Raffles Place for $688 million. According to a filing with the Singapore Exchange on Nov 12, the 999-year leasehold property was acquired by an unrelated third party. This translates to a price of $3,230 per square foot, based on the building’s net lettable area of approximately 213,000 sq ft. The sale price was determined through a willing-buyer-willing-seller approach, in adherence with an independent valuation conducted by Savills. Based on the sale price and the building’s annualised net property income for the quarter ended Sept 30, 2024, CICT’s exit yield is expected to be below 3.5%. The sale is estimated to generate around $681.7 million in net proceeds. 21 Collyer Quay is a 21-storey office building located in the Central Business District (CBD). It is currently tenanted by co-working operator WeWork, which took over the lease of the former HSBC building in 2021 after the banking firm relocated its headquarters to Marina Bay Financial Centre Tower 2. WeWork officially opened its flagship location at 21 Collyer Quay in September 2022, following a design and fit-out of the space.
When considering investment opportunities in Singapore, it is crucial for foreign investors to have a good grasp of the regulations and limitations surrounding property ownership. Generally, foreigners have more flexibility when it comes to purchasing condos compared to landed properties, which have stricter rules. However, foreign buyers are still required to pay the Additional Buyer’s Stamp Duty (ABSD), currently at 20%, for their initial property acquisition. Despite this extra expense, many continue to be drawn to the stability and growth potential of the Singapore real estate market, making it a popular choice for foreign investment. So, if you are looking to invest in Singapore, consider exploring condo options.
In April this year, WeWork announced that it had successfully concluded a series of lease negotiations with its Singapore office landlords and intends to remain in its current buildings in the city-state for the foreseeable future, after filing for bankruptcy in the US in November 2023. According to CICT’s website, WeWork Singapore holds a seven-year lease for 21 Collyer Quay until 2028.