Parakou Building sold at near record price

Parakou Building, a low profile but spanking new office building at the corner of Robinson Road and McCallum Street, has been sold at $2,013 per square foot (psf) of net lettable area – the highest in the current office cycle.

The seller is Parakou Shipping Group of Hong Kong, while the buyer is said to be a fund from overseas, most likely from the UK. The absolute sum of the Parakou Building deal was $128 million, BT understands.

The 16-storey freehold building was completed last year and has a net lettable area of about 63,580 square feet. Jones Lang LaSalle (JLL) is said to have advised the buyer.

The $2,013 psf deal surpasses the $1,783 psf achieved last month for SIA Building – when German pension fund manager SEB bought the property for $526 million from seller TSO Investment – a fully owned subsidiary of a property fund managed by CLSA Capital Partners.

SIA Building is on a site with a remaining lease of 86 years. The sale of SIA Building was also brokered by JLL.

Market watchers reckon that with the current buoyant office market conditions, it is just a matter of months before the all-time office price record of $2,200 psf set in early 1996 is surpassed. That was when Straits Steamship Land, now Keppel Land, sold seven floors of what is now known as Prudential Tower in the China Square area to Prudential Assurance Company Singapore.

Office rental and capital values in Singapore have shot up on the back of a shortage of office space and strong demand.

JLL’s Q1 2007 Asia-Pacific Property Digest shows that capital values for Grade A office space in Singapore have jumped 82.7 per cent year-on-year to US$14,258 per square metre. Over the same period, rental values have risen 106.2 per cent to US$820 per square metre per annum.

Source: The Business Times, 15 May 2007