Grade A floor price approaches decade low
Property agents said the sale of an entire floor in the Bank of America Tower in Admiralty for $3,750 per square foot heralded a further correction in grade A office prices.
They said they were stunned by the price, which was as much as 25 per cent below expectations.
The ninth floor, measuring 13,880 square feet, was sold by tender.
Agents speculated it was a distress sale and the vendor, a Singaporean Bank, had accepted the bid simply because it wanted to cut its losses.
The only other bid was reportedly even lower, they said.
'I would have expected such a floor with tenancy to go for around $4,000 per square foot or more,' one agent said.
The 33rd floor of Tower 2 in the nearby Lippo Centre reportedly sold yesterday for $5,200 per square foot.
Reflecting on the Bank of America deal, one agent said grade A office space had not been this cheap in almost a decade.
William Leung, commercial and industrial sales executive with AG Wilkinson & Associates, said he had received a number of calls from commercial landlords wanting to take grade A units off the market as a result of the sale.
'I had landlords telling me that they would rather lease their space out now than sell at prices like that,' he said.
Property agents said whole-floor office prices could fall another 5 to 10 per cent.
However, some said the price, while low, was not unrealistic.
Bryan Ho, senior manager with Treasure Land International Property Consultants, said the bidders obviously had taken into account the advanced age of the building, its low efficiency and the fact that it was a low floor.