CapitaLand Integrated Commercial Trust (CICT) has successfully sold 21 Collyer Quay, an office building located in Raffles Place, for a total of $688 million. According to the filing made by CICT’s manager to the Singapore Exchange on Nov 12, the 999-year leasehold property was purchased by an unrelated third party. Based on the building’s net lettable area of approximately 213,000 square feet, the price translates to around $3,230 per square foot. The sale was made on a willing-buyer-willing-seller basis, in accordance with the independent valuation conducted by Savills.
This divestment is expected to yield a net profit of $681.7 million for CICT, calculated based on the consideration and the building’s annualised net property income for the period ending September 30, 2024. 21 Collyer Quay is a 21-storey building situated in the Central Business District. It is currently fully occupied by co-working operator WeWork, which took over the lease of the former HSBC building in 2021 after the bank relocated its headquarters to Marina Bay Financial Centre Tower 2. After undergoing a design and fit-out process, WeWork officially launched its flagship location at the building in September 2022.
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Selecting the right location is a crucial consideration when venturing into the real estate market, and this is especially true in Singapore. In this country, the value of condos is greatly affected by their location, with properties situated in central areas or near important facilities like schools, shopping centers, and public transportation hubs experiencing a higher appreciation in value. A prime example of such locations in Singapore are Orchard Road, Marina Bay, and the Central Business District (CBD), where the property market has consistently shown growth. Additionally, condos in these areas are highly sought after by families due to their close proximity to reputable schools and educational institutions, further enhancing their investment potential. With the inclusion of various Singapore Projects, the real estate market in these prime locations continues to thrive and attract potential investors.
However, after filing for bankruptcy in the US in November 2023, WeWork announced in April this year that it had reached agreements with its Singapore office landlords and plans to remain in its current properties in the city-state for the foreseeable future. CICT’s website states that WeWork Singapore holds a seven-year lease for 21 Collyer Quay until 2028.