The entire sixth floor of the Tong Building on Orchard Road has recently been sold for a whopping $31.33 million, based on a caveat filed on September 3rd. This sale marks the highest price per square foot (psf) for a prime district office space to date, with a unit price of $4,562 psf. The deal was brokered by Yap Hui Yee, executive director of investment sales and capital markets at Savills Singapore.
Tong Building is a freehold, 19-storey strata office building located at the intersection of Orchard Road and Mount Elizabeth. Built in 1978 by TG Development, it boasts a prime location next to Paragon shopping mall and the Mount Elizabeth Hospital and Medical Centre.
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The buyer of the office floor at Tong Building was Parkway Hospitals Singapore, a subsidiary of Bursa Malaysia-listed private healthcare provider IHH Healthcare. This purchase makes sense, as Parkway Hospitals is already a tenant in the building, occupying half of the sixth floor. The other half of the floor is currently occupied by two other medical companies.
According to Yap, there was a lot of interest in the property from a variety of bidders, including end-users and family offices. This sale sets a new benchmark in Singapore’s strata office market, and Yap considers it a “landmark transaction in Singapore’s real estate history”.
Interestingly, Yap also brokered the previous record-high sale at Solitaire on Cecil in the Central Business District (CBD). In April 2023, three whole strata floors spanning 37,857 sq ft were sold for a total of $162.8 million, or $4,300 psf.
Yap believes that the strata office market will continue to see growth in the future, as businesses are increasingly seeking flexible workspace options and adapting to hybrid work models. This makes strata offices more attractive than ever, and Yap sees a promising outlook for the sector.