27-12-2018 | Space Recce
AN ENTITY controlled by Hong Kong private equity property group Gaw Capital Partners is understood to be buying Robinson 77 for about S$710 million from a fund managed by CLSA Real Estate.
The price works out to about S$2,300 per square foot on net lettable area (NLA) of 307,585 sq ft. The NLA comprises 301,567 sq ft of offices and 6,018 sq ft of retail space.
Once known as SIA Building, the property is on a site with a balance lease of about 74 years. The CLSA-managed fund completed a major refurbishment of the 35-storey building in 2017, after paying S$530.8 million for the property in a deal entered into in late-2016. Analysts have estimated the refurbishment cost at S$30 million-plus.
Gaw Capital Partners, set up by brothers Goodwin and Kenneth Gaw, also owns PoMo in Selegie Road and Hotel G in the Bencoolen Street/Middle Road area. Based on information on its website, the group has raised equity of US$9.8 billion since 2005 and commands assets of US$18.3 billion under management as of Q2 2018.
Analysts expect the group's acquisition of Robinson 77 to be pretty much a yield play for now, given the substantial asset enhancement works already completed by the seller.
Robinson 77 also boasts a 90-metre-long frontage along Robinson Road. It has 137 carpark lots and is near four MRT stations - the existing Tanjong Pagar and Telok Ayer stations; and upcoming Shenton Way and Prince Edward stations.
Following the makeover, the building's NLA rose to 307,585 sq ft from the 293,269 sq ft when CLSA acquired the property from the SEB ImmoInvest fund two years ago.
With the major upgrade completed, there will be very little capital expenditure required by a buyer which can then start riding immediately on the rapidly improving office market, JLL and CBRE noted back in August; the two jointly marketed Robinson 77 through an expressions of interest exercise.
Meanwhile, a tie-up between ARA Asset Management and British property group Chelsfield is expected to complete in January its acquisition of Manulife Centre at 51 Bras Basah Road for nearly S$556 million or about S$2,300 psf on the 11-storey commercial building's net lettable area of around 242,000 sq ft. The property is being sold on a remaining leasehold tenure of 96 years. The vendors are Alpha Asia Macro Trends Fund II, which is managed by Alpha Investment Partners, and City Developments.
Anchor tenant Manulife Singapore's lease of about 100,000 sq ft - roughly half the building's office space - will be expiring soon. This will create an opportunity for the incoming owners to potentially refurbish the property, which has an attractive city-fringe location, flanked by two MRT stations: Bencoolen station on the Downtown Line and Bras Basah station on the Circle Line.
The building has retail space on street level and offices above. Analysts have previously suggested that the retail space could be expanded from just the ground level currently to the second level or even third level; retail space typically fetches higher rents than offices. There is also potential to boost the building's net lettable space by scrapping excess carpark lots.
Moreover, with a chunk of the building's office space to be vacated soon, the new owners are free to sign fresh leases in the current uptrending office rental market.
Separately, a fund managed by a subsidiary of Kenedix, Inc of Japan has acquired a 25 per cent stake in Capital Square along Church Street from a fund managed by ARA Asset Management; the price is understood to be about S$270 million. Capital Square has leasable area of 388,118 sq ft and is on a site with about 77 years' balance lease.
(credit to Business Times: https://www.businesstimes.com.sg/real-estate/gaw-capital-partners-said-to-be-buying-robinson-77-for-about-s710m)
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