Anson House put up for sale for $175-180m

20140206-bt-anson-house-up-for-sale IT seems Anson House finds a new owner every two or three years. Its current owner, CBRE Global Investors, is understood to have put the 13-storey office block up for sale, with an indicative pricing of $175-180 million.

That would translate to $2,292-2,357 per square foot on net lettable area (NLA) of 76,362 sq ft for the building, which is on a site with about 82 years of remaining lease.

About 20 per cent of the building is currently vacant, which allows for a potential occupier seeking to partly occupy the building as well as provision for signage and naming rights.

Based on existing leases, the average passing rent is about $8 per square foot per month. Recently inked leases in the building have been at $8.50-$9.50 psf per month.

On a fully leased basis, the net yield is expected to be around 3.5-3.75 per cent.

CBRE Global Investors, formerly known as ING Real Estate, paid $148 million for the property in 2011. It bought the asset from a private high net worth individual investor, who in turn had purchased it for $85 million in 2009 from a fund managed by Australia's Macquarie Bank. The latter made a loss on the transaction, against its 2007 purchase price of $129.5 million.

This time around, CBRE and Jones Lang LaSalle are marketing the property for sale through private treaty.

Besides a potential part occupier that may be keen on naming rights as well, Anson House may also appeal to core property funds looking for steady rental income stream from an asset that does not require refurbishment.

Adding to this appeal is the relatively "bite size" pricing, in the $100-200 million range. Potential strata subdivision of the building, subject to approval from the authorities, could provide another angle for a buyer, who could then sell the individual units. The building has about 7,000 sq ft of space per floor, with three to four tenants on some floors.

Major tenants include ArcelorMittal and United Technologies.

Anson House boasts a high floor-to-ceiling height of 3.4 metres, compared with the typical 2.9 metres for some newer office developments. In addition, it has 103 car parking lots reflecting a ratio of one car park lot for every 936 sq ft of gross floor area, one of the highest in the CBD.

The 15-year-old building recently underwent a refurbishment including the main lobby and toilets. Chillers were also replaced, improving energy efficiency.

Last week, BT reported the sale of a half stake in the freehold Finexis Building at 108 Robinson Road in a deal that valued the property at nearly $2,300 psf on strata area.

Keppel Reit is looking for a buyer for its 92.8 per cent share of Prudential Tower with an asking price of $2,400 psf of NLA. Based on the 222,563 sq ft NLA that the Reit owns in the 30-storey tower, the deal size would be around $534.1 million. The top floor is owned by Prudential and half of the 16th floor is held by a private investor. The building is on a site with a balance lease term of about 81 years.

Meanwhile, Equity Plaza, jointly owned by Keppel Land and a fund managed by Alpha Investment Partners, could also be in the market. It is thought that the owners may be open to offers of around $580 million - translating to around $2,300 psf on net lettable area of about 252,600 sq ft. Formerly known as The Exchange and The Quadrant, the 28-storey office tower in Raffles Place is on site with about 74 years remaining lease.

Investors with a larger appetite and game for an asset that offers significant enhancement potential may be keen on AXA Tower at 8 Shenton Way. The owner, Blackrock, is said to be seeking at least $2,000 psf on the existing NLA of 674,000 sq ft, which would amount to $1.35 billion.

AXA Tower's existing gross floor area of about 1.02 million sq ft can be raised by around 200,000 sq ft if unutilised plot ratio is tapped. This can potentially be used to build a retail podium on an undeveloped part of the site and the cost of which is in the process of being estimated.

AXA Tower is on a site with about 67 years' balance lease.

Source: Business Times, 6 Feb 2014