ARA Asset Management has found a buyer for 61 Robinson Road just over 19 months after acquiring the office building in Singapore’s downtown core, according to a representative of the property fund manager, which expects to soon complete renovation of the 20-year-old property.
The company, which is in the process of being acquired by logistics specialist ESR, is selling the 20-storey asset to local financial management startup Rivulets Investments for S$422 million ($314.5 million), according to a report in Singapore’s Business Times, which was independently verified by Mingtiandi. ARA completed its acquisition of what was then known as Robinson Centre for a reported S$340 million in January 2020 on behalf of its ARA Real Estate Partners II fund.
“ARA Real Estate Partners II is pleased to have completed the sale of 61 Robinson, after successfully repositioning the property into a premium office building through an extensive asset enhancement initiative (AEI),” said ARA’s Stephen Tang, who serves as fund director for the private investment vehicle. “61 Robinson is a strong showcase of ARA’s investor-operator capabilities — from capital origination, asset management, to divestment — our in-house team covered the entire asset lifecycle to create value for our investors and the community.”
The property is changing hands at the equivalent of S$2,973 per square foot, with the total compensation representing a more than 24 percent premium to what ARA paid to acquire the building halfway between Raffles Place and Tanjong Pagar from Homax Pte Ltd, a private company controlled by the family of Taiwanese billionaire Tsai Tseng-yu.
Renovation and Rental Reversion
ARA’s upgrades to 61 Robinson Road have included expanding the net leaseable area to 141,958 square feet (13,188 square metres) from the original 132,300 square feet, in part by converting parking area to retail space. The renovations, which are set to be completed in October, also include upgrades to mechanical and electrical, as well as HVAC systems, and makeovers for the common areas.
Current tenants in the office project include Apollo Management Singapore, a local branch of the US investment firm, and insurance brokerage Arthur J Gallagher. ARA noted that it has achieved positive rental reversions of 25 percent based on average effective rents during the time it has owned the property, which it attributes to targeted upgrades of the building.
“Our asset enhancement initiative work was focused on creating a high-quality commercial asset aimed at discerning tenants in the asset and wealth management, financial services, technology and media industries who would be attracted to a well-renovated, green building with a touch of hospitality,” Tang said.
As part of the renovation effort, ARA achieved a gold rating for the building under Singapore’s BCA Green Mark standard for sustainable buildings, after the asset carried no green credentials at the time of the acquisition.
With an eye to rising standards for office space as companies attempt to coax employees back to work post-pandemic, ARA also invested in establishing a new layer of service at 61 Robinson Road by providing concierge and community management offerings and a digital app for occupiers to manage their use of the building.
New Buyer Emerges
The purchase of 61 Robinson Road, which occupies a 15,125 square foot leasehold site set to reach maturity in 74.5 years, introduces a new buyer to Singapore’s core property market.
Rivulets Investments, which was founded three years ago by former Shearman & Sterling attorney Chin Chiang Lian and investment advisor Michael Sidaway, did not respond to inquiries from Mingtiandi before publication and has not previously been publicly linked to major purchases of Singapore investment properties.
Before founding Rivulets in 2018, Chin and Sidaway had worked together at One Tree Partners, another investment management firm in Singapore, for several years.
The sale of 61 Robinson Road is reported to have been brokered by Savills, although representatives of the agency declined to comment for this story.