Case Study · Singapore

Diamond merchant buys prime commercial office unit for investment

30 June 2022

Diamond merchant buys prime commercial office unit for investment

A savvy diamond merchant in Singapore recently made a smart investment by purchasing a prime commercial office unit at a substantial discount through an auction. The unit, located in a prime business district, offers a strong potential for rental income and capital appreciation. The diamond merchant leveraged their financial prowess to secure the unit, positioning themselves for future growth and success.

  • Location: Raffles Place, Singapore
  • Market Value: $15,000,000.00
  • Loan Amount: $8,520,919.10
  • Loan-to-Value: 56.81%
  • Duration of Loan: 24 months
  • Payment Schedule: Monthly
  • Asset Type: Commercial Building
  • Completion Time: 3 weeks

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FAQ

Can Rikvin Capital fund a CBD commercial office purchase?

Yes. Strata commercial offices in Raffles Place, Shenton Way, Tanjong Pagar and the wider CBD are core collateral for us. The Raffles Place case here closed at $8.5 million on a $15 million market value (56.8% loan-to-value), funded in 3 weeks with a 24-month term.

How does the auction discount affect how much I can borrow?

We size the loan against the lower of the auction price or an independent valuation. If the auction price is below market value (as in this Raffles Place deal), the headline loan-to-value looks higher but the loan is actually safer because it represents a smaller share of true market value.

What loan term is available for a CBD office investment?

Terms run from 6 to 24 months, with the Raffles Place case at 24 months. Longer terms suit investors who want time to either secure a tenant and refinance into a long-term bank loan, or to ride out market conditions before sale.