Read the Latest News Here: 71 Robinson Road SOLD to Sun Venture
71 Robinson Road is all set to change hands and a sale is in the works for this 15-storey office block.
It has been reported in the media that Sun Venture, the property investment group is busy conducting exclusive due diligence, for which it has been granted the rights with the aim to purchase this office property.
It is being estimated that the price for this acquisition would be around S$2,800 psf for the NLA (Net Lettable Area) of 237,644 sq ft and this would translate into a price tag of S$660 million for the office block.
This price reflects around 3.5% net yield considering the income from the current leases in the building.
The office property currently enjoys 100% occupancy with S$10 psf rent per month. Among the existing tenants at this office block include Visa, CommerzBank, WeWork and Ogilvy.
The commercial site is located at the intersection of Robinson Road and McCallum with 74 years remaining in its lease tenure. It was completed 11 years back and has been built as per Grade-A specifications.
The owners of the commercial property, Commerz Real has appointed JLL and CBRE as the marketing agent for the sale earlier in the year.
According to people aware of the developments the agents had contacted a small list of potential buyers and launched an Expression of Interest exercise without any fanfare which ended in May.
The small group of shortlisted buyers had been asked to work on their bids and come up with a final offer by last month and this finally led to the selection of Sun Venture which has entered into contract exclusive due diligence.
The office block came up on the site of erstwhile Crosby House which was bought by a venture between Kajima Overseas Asia and Lehman Brothers in 2006 from Singtel.
The site was then redeveloped to the present day 71 Robinson Road.
In April 2008, the JV sold the property to Commerz Real on a turnkey basis during its construction.
The sale back then had set a new record of S$3,125 psf price when it had 85 years lease term remaining.
The S$3,125 psf price remained a yardstick of sorts for the next eight years for transaction in Singapore’s office space.
In 2016, Straits Trading Building located along 9 Battery Road exceeded that record fetching a price at the rate of S$3,524 psf.
The 999-year leasehold property was bought by MYP Ltd, a company owned by Indonesia’s business tycoon Tahir and has been renamed MYP Centre since then.
It is interesting to note that Sun Venture was involved in that transaction as well having sold the property to MYP and pocketed S$560 million, a healthy return having bought the property in 2014 for S$450 million.
The group had also earned good returns from the transaction of Robinson Point, a 21-storey freehold property. It had bought it in 2012 for S$284 million from AEW and sold it in 2013 for S$348.9 million to Tuan Sing Holdings.
Sun Venture has been active in Singapore’s office market and currently has 50 Scotts Road in its portfolio for which the short lease shall end in 2023.
The group backed by investors from Singapore and Taiwan and is also the owner for Samsung Hub Office Space Levels 9 to 11.
They own the Westgate Tower in a venture with Low Keng Huat (Singapore) which is close to Jurong East MRT Station as well as retail stores of Paya Lebar Square.
As per data compiled by Savills Singapore on the office space transactions in Singapore the year has already seen deals amounting to S$3.05 billion for all transactions above S$10 million.
In 2018 the total transitions were amounted S$5.24 billion while in the preceding year it was S$7.5 billion
According to Alan Cheong, Executive Director at Savills Singapore there is a trend emerging among private equity funds and institutional investors for investing to Singapore’s office market.
He added that the momentum is likely to continue all through 2019 due to the returns on these investments.
The shortage of Grade-A office space for investments is also increasing the demands. With the rental market booming there would be increased interest in this commercial sector.