Gaw Capital To Buy Singapore Commercial Complex for $253M

A fund managed by Gaw Capital Partners has agreed to pay S$342 million ($253 million) for PoMo, a nine-storey office and retail complex in central Singapore, as the city-state’s real estate investment market continues to gather steam.

The Hong Kong private equity shop is purchasing the asset from a 51-49 joint venture of Enviro-Hub Holdings, a recycling and property group, and Singaporean developer BS Capital, according to an announcement by Singapore-listed Enviro-Hub.

The acquisition would make the Dhoby Ghaut area property Gaw’s first commercial asset in the city, after the private equity firm acquired the former Big Hotel in Bencoolen for S$203 million in 2015, which it has since refitted and renamed as Hotel G Singapore.

Office-Retail Complex Poised To Change Hands Yet Again

Under the terms of the deal, a Singapore-incorporated vehicle of a fund managed by Gaw has agreed to buy the entire interest in F2S1 Investment, which owns the property. The sale and purchase agreement was announced last Friday, after the deal was first proposed in September. The transaction still requires approval by the board of Enviro-Hub.

PoMo is located at 1 Selegie Road, near the Bras Basah MRT station, a neighbourhood known for its culture and heritage offerings. Touted as a “mallternative” to run-of-the-mill retail venues, the property has a gross floor area of nearly 235,000 square feet (21,832 square metres).

The development’s net lettable area of around 180,000 square feet (16,723 square metres) includes 110,000 square feet of offices and 70,000 square feet of retail space, implying a price per square foot of S$1,900 ($1,403).

PoMo’s offices are fully leased, while around 85 percent of the retail space is said to be taken up, according to an account in The Business Time of Singapore. The office portion is anchored by a Kaplan education centre and houses other educational and sports tenants, while the retail portion is heavy on food and beverage outlets.

The owners acquired the property from a vehicle of CLSA Capital Partners for S$336 million in 2013. That vendor, in turn, had bought PoMo from a joint venture of Australian developer Lend Lease and Silverpeak Real Estate Partners for S$255 million in 2011.

Lend Lease and its partner had purchased the development, then called Paradiz Centre, in 2006 before refurbishing and rebranding it. Built in 1986, the property has a 99-year lease commencing from 1983.

Singapore Commercial Sales Are on the Upswing

The impending deal marks another milestone for Singapore’s rebounding investment market. Commercial property sales trebled year-on-year to S$2.8 billion ($2.1 billion) in the third quarter, according to the latest market report by brokerage Colliers International.

Deal volume was buoyed by two major transactions during the quarter. In July, Singapore’s CapitaLand Commercial Trust (CCT) – a real estate investment trust managed by a unit of property behemoth CapitaLand – sold the 12-storey complex Wilkie Edge just down the street from the Pomo to Lian Beng for S$280 million ($203 million).

CCT was also responsible for the other watershed deal of the quarter, the acquisition of Asia Square Tower 2 from a BlackRock-managed real estate fund for about S$2.1 billion ($1.5 billion) – marking this year’s second-biggest office transaction in Asia.