A consortium of Singaporean companies has bought the lower block of Grand Millennium Plaza in Sheung Wan for HK$1.38 billion - a further signal of increased overseas interest in the local office market. The acquisition is the largest investment transaction for an existing property since the 1997 Asian financial crisis. The consortium's joint venture Rico Gem made the purchase but its controlling interests have not been disclosed. It had been rumoured earlier that the Singapore Government-funded Pidemco Land or investment fund GRA of the United States were the buyers but sources said the two companies were not involved. Singaporean firms which have shown an interest in local properties include Government Investment Corporation, DBS Land and Wing Tai Group. Meanwhile, sources said a deal for the Grand Millennium Plaza office tower had been sealed already, making it this year's second largest single property transaction. The other major deal was February's HK$1.88 billion purchase made by Pidemco Land and American International Group in February for a 65 per cent stake in Furama Hotel in Central. The hotel will be redeveloped into an office tower. Analysts said foreign capital apparently began to shift its attention to SAR office acquisition opportunities after last year's buying spree of luxury properties. GRA, Pidemco and Lend Lease acquired about HK$3.3 billion of luxury properties last year but recent interest has been in the office market which had shown signs of revival with improved rentals. The HK$1.38 billion price tag of the Grand Millennium Plaza tower can be translated into an average value of HK$3,700 a square foot. Assuming average monthly rental at HK$15 per sq ft it means the buyer reaps an investment yield of 5 per cent, analysts said. Located at 183 Queen's Road Central and 33 Wing Lok Street, the twin-tower commercial project was jointly developed by New World Development and Land Development Corporation (LDC). The lower block of Grand Millennium Plaza rises 28 floors - each with 12,000 sq ft of floor area. The total area provided by the block amounts to 370,000 sq ft. The top six floors of the building are solely owned by New World. The developer had previously acquired an adjacent site owned by Dao Heng Bank and incorporated the buildable area of the lot into the project. The remaining floors of the tower are jointly owned by New World and LDC - the attributable area from the LDC urban redevelopment project which New World joined as the partner. Completed in 1998, the lower block has been vacant since then. New World has been involved in the negotiation to dispose of the property for some time. The higher block has been renamed Cosco Tower since the mainland-funded Cosco Group bought the top 15 floors for HK$3 billion, or HK$10,000 per sq ft several years ago. The 55-storey tower's floor area is about 850,000 sq ft - each floor comprising 20,000 sq ft. One analyst said the unit price of $3,700 per sq ft for the Grand Millennium Plaza deal was not exciting despite the large lump-sum involved. He said the transaction should not stimulate market prices much. Cushman and Wakefield director Simon Chow said that the Grand Millennium Plaza deal was likely to further stabilise the office sales market as it reflected the continuing buying interest from foreign companies. However, as Sheung Wan was still awash with offices for sale, the district's office prices might not be boosted by the transaction, he said. Local developers were still cautious.