Robinson Point, 2HR placed on the market

Business Times: Thu, Mar 15

Properties expected to fetch $306m and $300m respectively 15 Mar 2012 19:11 by KALPANA RASHIWALA (SINGAPORE) US property fund manager AEW has put Robinson Point in the Central Business District and 2HR at Havelock Road on the market with pricing expectations of about $306 million and $300 million respectively, BT understands. The group is also said to have recently granted an option for the sale of four adjoining three-storey shophouses at Amoy Street for nearly $33 million. The AEW-managed fund that holds the three Singapore properties is also said to have sold assets in China and Hong Kong last year. The fund still has a few more years to run but reaping a profit from divesting assets could prove to be a strategic move in terms of cementing the track record of the group, which is said to be in the midst of raising a new Asia fund, suggest some market watchers. Sales of both 2HR and Robinson Point are expected to be structured through sale of shares in the respective companies which own the two assets. For 2HR, AEW is said to have secured outline permission from Urban Redevelopment Authority to convert the property to a 12-storey hotel. Alternatively, potential buyers could be keen on the asset on its existing commercial use with an eye on positive rental reversion. The existing building has seven storeys, an attic and two basement levels with a total net lettable area of about 175,300 sq ft comprising about 36,200 sq ft of retail space and close to 139,100 sq ft of offices. 2HR has 96 car park lots in the basements. AEW bought 2HR, formerly Apollo Centre, for $205 million in 2007 and completed an extensive refurbishment of the property in 2009. The building is currently nearly 100 per cent occupied. Estee Lauder is the major tenant, occupying about 50,000 sq ft. Other tenants include DSM Nutritional Products and MOL Tankship Management. Based on 2HR's existing rental income stream, the $300-million pricing expectation could reflect a net yield of about 2 per cent, according to some market estimates. The building is on a site with a remaining lease of about 70 years. It was previously in the market early last year - but without approval for conversion to hotel - at a price tag of about $302 million. The current expression of interest exercise, being conducted by exclusive marketing agent DTZ, will close towards the end of this month. For Robinson Point, AEW is said to have appointed CBRE as the exclusive agent for a private treaty deal, say sources. It is thought that the guide price is $2,300 psf on net lettable area of 133,214 sq ft, or a lumpsum of around $306 million. The freehold 21-storey office block was previously on the market in Q4 last year at a slightly higher expectation of $2,300-2,350 psf or $306.4 million to $313.1 million. While the office block was not sold back then, the next door 20-storey Robinson Centre, on a site with a balance lease term of about 85 years, changed hands for $293 million or $2,225 psf, also late last year. Robinson Point, which is around 15 years old, has a gross floor area which reflects an 11.2 plot ratio, which means the property has been developed to its maximum potential under Master Plan 2008. However, a potential angle for buyers is the possibility of strata titling the building into smaller office units and reselling them for a gain, given the buoyant strata office market of late as seen in brisk sales at Far East's PS100 in Tanjong Pagar earlier this month. All 100 office units - ranging from 420 to 517 sq ft - found takers during the weekend launch. The average price achieved was $3,000 psf. AEW bought Robinson Point for $203.25 million in early 2010 from CapitaCommercial Trust (CCT). Last month, CCT picked up Twenty Anson, a Grade A office tower near Tanjong Pagar MRT Station completed in 2009, for $2,121 psf. That has been the only sizeable office investment deal so far this quarter (up to March 12). Meanwhile, in the industrial property sphere, 17 strata units on the top two levels of the seven-storey Boustead House at Ubi Avenue 1 (near MacPherson MRT Station) were sold earlier this month for $14.63 million or about $325 psf, based on their total strata floor area of about 45,015 sq ft. Boustead House is on a site with a balance tenure of about 45 years. The buyer, a local company, is acquiring the space for its own use. DTZ brokered the sale. Source: Business Times