OCBC has put up for sale a 12-storey freehold office block at 110 Robinson Road, with an indicative price of S$45 million.
The price translates to about S$3,162 per square foot based on the building's net lettable area (NLA) of 14,233 square feet.
According to Cushman & Wakefield, which OCBC has appointed sole marketing agent for the sale of the property, the bank does not occupy any space in the building; instead it has leased out the space to tenants. Currently the occupancy rate is 76 per cent and the average passing rent on existing leases is about S$4.80 per square foot a month. Based on the property's current income, S$45 million price reflects a gross yield of 1.38 per cent.
However, there is upside for rental income from leasing out the vacant space as well as from achieving positive rent reversion for the space that is currently leased.
According to C&W's executive director of capital markets Shaun Poh, 110 Robinson Road's existing gross floor area (GFA) is estimated, but yet to be verified, at 22,123 sq ft - which reflects a plot ratio of 11.94. This exceeds the 11.2 plot ratio designated for the commercial-zoned site under Master Plan 2014. While the property does not have untapped GFA, there is scope to upgrade it through a major refurbishment exercise, and thereafter to achieve higher rentals, or even to do strata office sales. "The building could have just one strata title per floor given its small size," said Mr Poh. "We have also been approached by potential end-user buyers in the co-working space arena," he added.
The building was built in the 1980s. OCBC is divesting the asset as it does not use it for its own operations. Moreover it has received unsolicited offers, said Mr Poh. "At S$45 million, the deal size is very palatable; this should appeal to not only smaller institutional investors and corporate end-users but also high net worth individuals and boutique developers."
Market watchers suggest that 110 Robinson Road will be keenly eyed by the owners of the next door properties on either side - two offshore entities managed by Sin Capital Group which own Finexis Building at 108 Robinson Road; and Grace Global, which owns Robinson 112.
Mr Poh noted that the timing of the launch of 110 Robinson Road's tender is in tandem with the sudden surge in interest in Singapore office assets following the recent sales of Asia Square Tower 1 in Marina View (at S$3.38 billion or about S$2,700 psf on NLA) and the Straits Trading Building in Battery Road (at S$560 million or S$3,524 psf on NLA).
In early 2014, Sin Capital bought a half-stake in Finexis Building in a deal that valued the office block, which is also 12 storeys and freehold, at S$2,250 psf on the building's strata area of 53,830 sq ft, which is close to its total net lettable area.
Earlier, in late 2011, Sin Capital acquired its first 50 per cent in Finexis Building; that purchase valued the property at S$1,900-plus psf on strata area.
If either Sin Capital or Grace Global were to clinch 110 Robinson Road, they could do a major refurbishment or a redevelopment involving their respective property and 110 Robinson Road - to achieve a longer road frontage and a bigger floor plate.
The tender for 110 Robinson Road closes on July 26.
Source: Business Times, 28 Jun 2016
Another Robinson Road office building offered for sale
Another office building in the central business district has been offered for sale after recent blockbuster deals perked up the office property market. A freehold 12-storey commercial building at 110 Robinson Road was put on the market on Monday with an indicative pricing of S$45 million.
The price works out to about S$3,161 per square foot based on a net lettable area of 14,233 sq ft, its sole marketing agent Cushman & Wakefield said.
Built in 1980s, the commercial building comprises 11 office floors with a retail unit on the ground floor which is currently tenanted to a dental clinic. The property is fully owned by OCBC Bank, according to the bank's 2015 annual report.
Mr Shaun Poh, executive director of capital markets at Cushman & Wakefield said: "Even before the owner decided to put the property on the market, it has proven to be highly sought after as various unsolicited offers have been made to the owner."
Mr Poh added that the asset is ideal for institutional fund groups, corporate end users, high net worth individuals as well as boutique developers who are looking to redevelop the building for strata sale. According to the 2014 Master Plan, the site is zoned for commercial use, and can be built up to 35-storey.
Cushman & Wakefield told The Straits Times that its occupancy rate hovers around 75 per cent and the units are leased mostly to small and medium-sized enterprises, including shipping companies and auditing firms.
The building is the latest office property to be placed on sale following the sale of Asia Square Tower 1 by BlackRock to the Qatar Investment Authority for S$3.4 billion, and Indonesian tycoon Dr Tahir's offer buy the Straits Trading Building for S$560 million, earlier this month.
Last week, the former SIA Building in 77 Robinson Road - a stone's throw away from 110 Robinson Road - was offered for sale at a guide price of S$575 million or S$1,960 psf.
Cushman & Wakefield said the tender exercise for 110 Robinson Road will close at 3pm on July 26, 2016.
Source: Straits Times, 28 Jun 2016