Samsung Hub

71 Robinson Road quietly put on the market

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STEALTH marketing is going on at 71 Robinson Road, which was last transacted in April 2008 at a then-record price of S$3,125 per square foot.

The Business Times understands that an expression-of-interest exercise to find a buyer for the 15-storey office block began without publicity in April, with the appointed marketing agents, CBRE and JLL, approaching a small pool of potential buyers.

Submissions of offers by potential buyers were made last month; building owner Commerz Real is still in talks with shortlisted parties, BT understands.

The word in the street is that the building, with almost 74 years of its leasehold tenure left, was presented to the market with an indicative pricing of S$2,850 per square foot on net lettable area (NLA).

Based on 71 Robinson Road's approximately 237,645 sq ft NLA, this works out to a price tag of around S$677.3 million.

Market watchers noted that the S$2,850 psf indicative pricing is higher than the S$2,308 psf which Robinson 77 next door fetched late last year. Buyer Gaw Capital paid the seller, a fund managed by CLSA Real Estate, nearly S$710 million for that 35-storey property. (see amendment note)

Both buildings are on sites with state leases that expire in February 2093.

That said, Robinson 77 is an older building. It was completed in 1997 (against 2008 for 71 Robinson Road), but has been substantially refurbished a few years ago.

The newer 71 Robinson Road has superior specifications. It has bigger floor plates, that is, leasable space per floor, each of which spans about 20,000 sq ft; the next-door property's floor plates typically range between 8,000 to 12,000 sq ft.

71 Robinson also has higher floor-to-ceiling height, in addition to having full-height windows, note office leasing agents. Reflecting its superior specs, this property has been commanding higher rents, say market watchers.

When Robinson 77 went to the market around last July/August, the average monthly passing rental was said to have been around the mid-S$7 psf mark. The building's occupancy rate was a shade above 90 per cent.

On the other hand, 71 Robinson Road is said to be running at full house with an average passing rent in the low-S$10 psf range. Tenants in the building include CommerzBank, Visa, Ogilvy and WeWork.

A senior office leasing agent said: "Blue-chip tenants with bigger space requirements would choose a building with a larger floor plate, so they can operate more efficiently over fewer floors."

71 Robinson Road stands on the site of the former Crosby House, which Singtel sold in 2006 to a Lehman Brothers-Kajima Overseas Asia partnership. They redeveloped the site into the current 71 Robinson Road office block, selling the property on a turnkey basis to Commerz Real in April 2008, as it was being built.

At the time, the site had about 85 years left on its lease term.

That transaction came with a coupon payment by the seller to Commerz Real, amounting to 4.5 per cent for the duration of construction.

The S$3,125 psf transaction remained a benchmark price for an entire office building in Singapore for eight years. In 2016, that record was broken when listed MYP Ltd, controlled by the family of Indonesian tycoon and philanthropist Tahir, bought the Straits Trading Building at 9 Battery Road for S$3,524 psf on NLA, or a total quantum of S$560 million. (The 28-storey, 999-year leasehold building has since been renamed MYP Centre.)

Anson House

Meanwhile, the owner of Anson House is said to have granted exclusive due-diligence rights to a potential buyer.

Market watchers say it is likely to be Arch Capital Management.

The price is expected at around S$210 million, which works out to over S$2,400 psf on an NLA of about 86,200 sq ft.

Located near Tanjong Pagar MRT station, Anson House is on a site with nearly 77 years left on its lease. The property is owned by a fund managed by Savills Investment Management, formerly known as SEB Asset Management.

Samsung Hub

Chinese Chamber Realty is understood to have bought the entire Level 14 of the 999-year leasehold Samsung Hub in Church Street for S$44 million.

This translates to S$3,356 psf on approximately 13,110 sq ft of strata area.

This was a mortgagee sale; the mortgagor, Kyen Resources Pte Ltd, had paid S$39.72 million or S$3,030 psf for the floor in 2014.

Kyen Resources is in receivership.

Including the latest deal, Chinese Chamber Realty, which is fully owned by The Financial Board of the Singapore Chinese Chamber of Commerce, owns a total of 11 floors (Levels 22 to 30, and Levels 14 and 15) in the 30-storey building. Chinese Chamber Realty co-developed Samsung Hub, which was completed in 2005.

Based on Savills Singapore data, Singapore office transactions of S$10 million and above in the private sector so far this year have totalled S$1.9 billion. The figure for the whole of last year was S$5.2 billion.

Colliers International's average monthly rental value for CBD Grade A office space rose 2.3 per cent quarter on quarter to S$9.64 psf in Q1 2019.

For the whole of this year, the group is looking at an 8 per cent increase, moderating from the high base last year, when the rise was 14.9 per cent on the back of tight supply and limited new completion.

Colliers said in its Q1 Singapore office market report: "We expect capital values to trail our projected rent growth, and hence, yields to remain largely stable over 2019-2021."

In general, global capital still favours gateway cities such as Singapore, it added.

Source: Business Times, 15 Jun 2019

Amendment note: An earlier version of the story had wrongly stated the S$2,850 psf indicative pricing is lower than the S$2,308 psf which Robinson 77 next door fetched late last year, when in fact it should be higher than S$2,308. The article above has been revised to reflect this.


Samsung Hub level 20 sold for S$3,550 psf

AN office floor at Samsung Hub along Church Street has been sold for S$46.62 million or S$3,550 per square foot based on its strata area of 13,132 sq ft.

On psf basis, this is the highest in the 999-year leasehold building, which is in the Raffles Place financial district.

A company whose shareholders include an Indonesian was granted an option recently to buy the entire 20th floor of the 30-storey building.

The floor is being sold by Lei Shing Hong Properties (Singapore), part of the Hong Kong-based Lei Shing Hong (LSH) group, which is involved in businesses ranging from retailing premium cars to property development and investment.

The LSH unit had paid S$43.07 million or S$3,280 psf for the floor in February last year.

BT understands that the group had planned to occupy the space and even did some renovations, but later changed its mind. The floor is currently vacant.

The S$3,550 psf for the 20th floor busts the previous high of S$3,500 psf in the building, set on two occasions. The first was back in 2013 during the heyday of the strata commercial property market before the introduction of the Total Debt Servicing Ratio framework; in that deal, a small unit of 883 sq ft on the 17th floor was transacted for S$3.09 million.

That same unit was resold at the identical price last December, along with an adjoining, larger unit of 2,562 sq ft that went for S$3,300 psf or S$8.45 million. The larger unit was previously transacted in 2013 for S$3,200 psf or nearly S$8.2 million.

In the December deals, both units are understood to have been bought by an insurance agency which plans to occupy the space.

The two units were sold by a couple of local companies that used to occupy the units but which handed over the units on vacant possession to the buyer recently.

CBRE director of capital markets Sammi Lim brokered the sales of both units.

She is also handling the ongoing sale of the 20th floor but declined to comment as it is still at an early stage.

BT understands the party that was recently granted an option for the floor's purchase is a Singapore-incorporated company the ultimate shareholders of which are Ryan Kristoffer Silfanus, an Indonesian citizen, and Singaporeans Tan Lu Dong and Ng Soo Tiong

Samsung Hub, which received Temporary Occupation Permit in November 2005, is one of the very few 999-year leasehold/freehold buildings in Singapore's Central Business District offering strata office play to investors.

Source: Business Times, 26 Apr 2018

Samsung Hub office floor sold at S$3,250 psf

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Sun Venture sells Level 8 to a HK party but plans to retain three other floors in the 999-year building

THE eighth floor of the 999-year leasehold Samsung Hub has been transacted at S$3,250 per square foot on strata area, totalling S$42.6 million.

This reflects around 3.2 per cent net yield based on the monthly rental of slightly over $10 psf at which the lease for the floor is said to have been renewed for a further three-year term starting September this year, said Sammi Lim, associate director (investment properties) of CBRE who brokered the transaction through private treaty.

Comprising four strata units adding up to 13,110 sq ft, the floor was sold by Sun Venture following an unsolicited offer by the buyer, which is a low-profile Hong Kong-based property investment company that has previously bought strata commercial units from Sun Venture in other buildings here.

CBRE's Ms Lim described the S$3,250 psf for Level 8 of Samsung Hub as an "attractive (price) to the seller, given that it is on a lower floor compared with the most recent transaction in the building at S$3,280 psf for Level 21 last October".

Market watchers said the transaction will no doubt be of interest to potential buyers of strata office units in the vicinity.

At GSH Plaza, agents are marketing strata office units of 480 sq ft to 1,700 sq ft, on Levels 3 to 15 of the 28-storey building, at S$2,850 to S$3,500 psf, with a bulk discount of 10 per cent given to those who buy an entire floor.

Word on the street is that there has been a dearth of takers for entire floors, so agents are trying to assemble individual unit buyers into consortiums for full-floor purchases. Cheque collection is in progress but some potential buyers are awaiting news of bigger discounts/incentives for bulk purchases. A planned VVIP launch of the project slated for today is said to have been postponed to April 8.

Formerly known as Equity Plaza, the property stands on a site with a balance lease term of about 73 years. The owner - a GSH Corporation-led consortium - is not seeking any lease top-up from the authorities. The building will undergo extensive refurbishment.

At Prudential Tower, which is on a site with around 80 years left on its lease, a KOP-led consortium that acquired 19.5 floors in the building last year has sold four half-floor units (either about 5,100 sq ft or 5,950 sq ft) on Levels 10, 11 and 19 at between S$2,750 psf and S$2,805 psf since last year. Prudential Tower has 30 storeys. Work is still in progress in terms of securing approval from the authorities for further strata subdivision of the existing strata titles - either half floor or full floor - into smaller units based on existing tenancies.

Over at Samsung Hub, Sun Venture also owns Levels 9, 10 and 11 in the 30-storey building along Church Street. It acquired the four office floors in the building from Ho Bee in August 2010 for S$2,125 psf.

When contacted, Sun Venture managing director Alvin Teo said the company's other three floors are not available for sale. "We intend to hold the space for the long term, given the scarcity of freehold/999-year office space in Singapore."

The Singapore-based private real estate investment company is said to have funding from Taiwanese investors. It also owns Straits Trading Building in Raffles Place and 50 Scotts Road.

Sun Venture also jointly owns (with Low Keng Huat) the retail podium of Paya Lebar Square and Westgate Tower, comprising 20 levels of offices next to Jurong East MRT station.

Source: Business Times, 31 Mar 2015