Angelo Gordon JV Closes in on $570M Sale in Singapore’s Bugis Area 

Singapore’s office market continues to heat up with two towers in the city-state’s downtown area nearing sales at a combined S$790 million ($570 million), including a property in the Bugis area which Sun Venture is close to buying from an Angelo Gordon joint venture, Mingtiandi has learned.

The Singaporean investment manager is locked into exclusive due diligence to buy the 15-storey Bugis Junction Towers above the Bugis MRT Interchange from Angelo Gordon and TCRE Partners for a price close to S$680 million, market sources said, confirming the news first reported by the Business Times.

In Tanjong Pagar, a unit of Japanese construction and real estate firm Kajima Corp is understood to be purchasing Nehsons Building at 24 Peck Seah Street for S$111.1 million, with plans to redevelop the ageing, nine-storey block into a mixed-use project.

Should both deals be consummated, the pair of transactions would push office investments in Singapore to more than S$5.2 billion so far this year, which would surpass the full-year 2021 total.

Angelo Gordon Exits 2 SG Assets

Should Sun Venture follow through with the transaction at the northern fringe of Singapore’s downtown core at the reported price, it would be paying around S$2,733 per square foot for the 248,853 square foot (23,119 square metre) Bugis property, which is equivalent to a 24 percent increase from the S$547.5 million that Angelo Gordon and its local partner paid to acquire the asset in 2019.

The asset has 12 floors of office space while the three lower levels provide retail units occupied by tenants like state agency Enterprise Singapore and Chinese shared office provider Ucommune. The project has around 70 years left of its 99-year land tenure.

Situated at 230 Victoria Street, the 1994-vintage property is part of the Bugis Junction integrated development which also includes CapitaLand’s Bugis Junction shopping mall and the InterContinental Singapore Hotel, which is currently held by Frasers Hospitality Trust.

Sun Venture’s potential acquisition comes two weeks after the local firm agreed to sell the 20-storey Westgate Tower office property in suburban Jurong East to AEW for S$680 million, or around the same price that it is said to be paying for its Bugis target. Company representatives declined to comment on the latest deal.

The Angelo Gordon JV would be divesting the Bugis Junction Towers three years after purchasing it from Singapore-listed Keppel REIT and roughly a year after TCRE completed S$10 million in renovations.

The Bugis disposal comes as the New York-based private equity group is also reportedly selling 22 units in the Draycott Eight condominium near the Orchard Road shopping belt to an unidentified Indonesian family for S$168 million.

Mingtiandi reached out to Cushman & Wakefield, which brokered that transaction, but representatives declined to comment.

Ageing Tower Has Redevelopment Potential

Less than five kilometres (three miles) away in Tanjong Pagar, Kajima is picking up Nehsons Building for a price equivalent to around S$1,605 per square foot for the property’s 69,200 square feet of gross floor area.

The seller is understood to be a Singapore entity named Nehsons Pte Ltd, which is controlled by an unidentified family from Malaysia surnamed Ng, based on the Business Times account. The site has around 47 years left on its 99-year tenure.

Among the options for the buyer, according to the media report, is to redevelop the 1973-vintage building into a mixed-use complex combining commercial and residential space. The property is within a short walk of GuocoLand’s Guoco Tower and the Tanjong Pagar subway station.

The Peck Seah Street pickup would add to Kajima’s growing portfolio of Singapore office towers which already includes 55 Market Street, a 16-storey building in Raffles Place which it acquired from AEW for S$287 million earlier this year.

CBRE is understood to be brokering the sale of Nehsons Building, but declined to comment.

Office Investments Hit $3.4B

Investments in Singapore’s office market have picked up this year with S$4.7 billion worth of office assets changing hands in the first six months – a volume that is around 10 percent short of 2021’s full year total of S$5.2 billion, based on data from JLL.

Signs of recovery are also emerging in the leasing market, with CBD Grade A office rents rising for the fifth consecutive quarter to S$10.74 per square foot per month during the three months ending 30 June, which is just shy of the S$10.81 per square foot monthly rate recorded in the fourth quarter of 2019.

“Geopolitical and economic uncertainties could temper business confidence and dampen occupier demand for office space in 2H22,” said Tay Huey Ying, head of research and consultancy for JLL Singapore. “However, the availability of space in the CBD will remain tight on the back of the continuing office redevelopment momentum… Hence, upward pressure on rents should persist.”

Tay expects office rents for grade A assets in Singapore’s CBD could hit S$10.81 per square foot by the third quarter of this year.