US-based PGIM Real Estate has picked up an office building on Singapore’s Robinson Road, an emerging hotspot for investors seeking value-add real estate opportunities in the city centre, according to government records.
Market sources confirmed that the real estate investment arm of global asset manager PGIM bought the 12-storey tower at 108 Robinson Road, formerly known as the Finexis Building, for S$143 million ($107.6 million). The seller is local private equity firm Sin Capital Group, which operates out of the building.
PGIM’s purchase of the 1970s-vintage office block comes less than three months after the Prudential Financial affiliate reached a $1 billion final close on its latest value-add real estate fund targeting the Asia Pacific region. The firm’s head of APAC, Benett Theseira, said at the time that 2021 stood out as a year of opportunity in the region. Inquiries by Mingtiandi to PGIM and Sin Capital went unanswered at the time of this story’s publication.
The purchase on a rapidly upgrading strip in Singapore’s central business district is PGIM’s second Singapore property acquisition in the past eight months and comes as the city-state’s resilient economy and increasing attractiveness as a regional headquarters location attract major office investments by global funds.
PGIM’s freehold prize has a net lettable area of 54,832 square feet (5,094 square metres), meaning that the investment manager paid S$2,608 ($1,963) per square foot for the commercial asset.
Sin Capital had originally bought the office block in halves, acquiring a 50 percent stake in 2012 and the remaining stake in 2014 from a partnership led by local real estate firm Buxani Group. The latter transaction valued the asset at S$110 million.
The deal with PGIM comes as Sin Capital, led by local entrepreneur David Sin, conducts a tender for the sale of Fullerton Healthcare Corp. The medical services provider, which is based in the building, is majority-owned by Sin Capital and also backed by RRJ Capital.
After an aborted attempt to list on the Singapore Exchange six years ago, Fullerton Health is struggling to win over potential investors sceptical of the company’s pitch that the COVID-19 pandemic has rejuvenated the business, the Business Times reported.
A major artery through Singapore’s downtown area, Robinson Road has become a magnet for redevelopment-minded investors in recent years.
In mid-2019, local real estate firm Sun Venture bought a 13-storey office tower at 71 Robinson Road from a unit of Germany’s Commerzbank for S$655 million. Sun paid S$2,756 per square foot for the 237,644 square foot property at Robinson and McCallum Street, just south of Raffles Place.
As 2019 drew to a close, ARA Asset Management completed the purchase of the 20-storey Robinson Centre at 61 Robinson Road for S$340 million through the Singapore firm’s ARA Real Estate Partners Asia II value-add fund. At 132,300 square feet of net lettable area, the building directly across the street from 108 Robinson Road went for S$2,570 per square foot.
Then in August 2020, Tuan Sing Holdings agreed to sell the 21-storey Robinson Point office building at 39 Robinson Road for S$500 million, or 34 percent over the property’s book value, notching an above-market deal in the wake of the COVID-19 crisis. The buyer, described as an unrelated party incorporated in the British Virgin Islands, paid S$3,736 per square foot for the building’s net lettable area of 133,830 square feet.
The purchase of 108 Robinson Road is the latest Singapore play for PGIM Real Estate, an affiliate of US giant Prudential Financial.
Last month, the firm joined the sustainability-linked financing parade by securing a S$900 million green loan for refinancing northeastern Singapore’s NEX shopping mall, for which PGIM Real Estate serves as the asset manager. The project received favourable terms for the loan because of eco-friendly enhancements made to the property.
“The strategic improvements completed at NEX geared toward furthering the sustainability of the asset are demonstrative of PGIM Real Estate’s broader commitment to incorporating ESG principles across our global portfolio,” Theseira said at the time.
The fund manager’s previous asset buys in Singapore include the 212,000 square foot Luxasia industrial building in the Paya Lebar region for S$75 million last September and the 362,000 square foot 78 Shenton Way office property near Tanjong Pagar MRT station for S$75 million in 2018.
Crawling With Fund Managers
Another global fund titan keeping an eye on Singapore is US-based Blackstone, which announced Wednesday that funds managed by the group had completed the acquisition of an office building nicknamed the Sandcrawler from Disney-controlled Lucas Real Estate for S$176 million.
The eight-storey office block is located close to the University of Singapore in the One North tech park and is designed to look like the tank-treaded fortress where Luke Skywalker purchased R2D2 in the original Star Wars film.
“The acquisition of this iconic building is part of our continued commitment to investing in high-quality office spaces that cater to tenants in growing sectors,” said Alan Miyasaki, Blackstone’s head of real estate Asia acquisitions. “In Singapore, we see ongoing demand for business parks that offer a unique campus-style experience, supported by the government’s efforts to attract global companies to set up regional headquarters here.”
Real estate services firm Colliers recently predicted that Singapore’s property investment volume would recapture pre-COVID levels in the coming quarters.
Jerome Wright, senior director of capital markets and investment services at Colliers Singapore, said commercial assets remain attractive as more tech giants set up local bases to take advantage of the country’s safe-haven status, pro-business environment and economic growth.