Office Floor Tong Building Sold 3133 Mil Setting New High 4562 Psf
The sale of the entire sixth floor of Tong Building on Orchard Road has made headlines, with a transaction value of $31.33 million recorded in a caveat on September 3rd. The strata office floor covers a total area of 6,867 square feet and was sold for a unit price of $4,562 per square foot – the highest ever recorded for an office space in the prime districts.
The deal was brokered by Yap Hui Yee, Executive Director of Investment Sales and Capital Markets at Savills Singapore. Located at the prime corner of Orchard Road and Mount Elizabeth, Tong Building is a 19-storey freehold strata-titled office building constructed by TG Development in 1978. It boasts a strategic location next to Paragon shopping mall, with Mount Elizabeth Hospital and Medical Centre situated just behind it.
The purchaser of the office floor at Tong Building, as recorded in a property title search, is Parkway Hospitals Singapore – a subsidiary of Bursa Malaysia-listed private healthcare provider, IHH Healthcare. This comes as no surprise, as the medical provider is already an existing tenant in the building, occupying half of the sixth floor. The remaining half is held by two other medical companies.
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With its close proximity to Mount Elizabeth Hospital and Medical Centre, it is a logical move for Parkway Hospitals to acquire the entire sixth floor of Tong Building. Yap noted that there was significant interest from a diverse pool of bidders, including end-users and family offices.
According to Yap, the record-breaking unit price of $4,562 per square foot for the sixth floor of Tong Building sets a new benchmark in Singapore’s strata office market. She considers this transaction a landmark in our real estate history. It is also worth noting that Yap was the broker for the previous record sale at Solitaire on Cecil in the CBD. In April 2023, three whole strata floors spanning 37,857 square feet were sold for a total of $162.8 million, or $4,300 per square foot.
Yap also predicts that the strata office market’s upward trajectory is set to continue. She attributes this to the increasing demand for flexible workspace solutions and the adaptation to hybrid work models by businesses. As a result, strata offices are now more attractive than ever. Their resilience and ability to meet evolving demands bode well for the future outlook of this sector.