Arch Capital Buying Singapore’s Anson House for S$210M

Arch Capital Management is buying Anson House in Singapore for S$210 million ($152 million), according to market sources.

A sale and purchase agreement is due to be signed this week, with Arch acting on behalf of an unnamed German fund, while completion of the deal is expected within the next ten days.

The Hong Kong-based fund manager is acquiring the 13-storey office tower in the city’s Tanjong Pagar area from a fund managed by Savills Investment Management. Sources at Arch Capital declined to comment at this time and officials at Savills Investment Management had not responded to inquiries from Mingtiandi by the time of publication.

The property investment affiliate of London-listed Savills took over Anson House when it purchased real estate fund manager SEB ImmoInvest from Sweden’s SEB Group in 2015, with the Scandinavian fund having acquired the asset for S$172 million the previous year.

The acquisition of the property at 72 Anson Road in Singapore’s financial district is set to be the latest in a series of big-ticket transactions in the city-state after a pair of office properties changed hands for a combined S$2.2 billion last week.

Arch Capital Joins Singapore Deal Surge

Based on a sale price of S$210 million, the Hong Kong-based fund manager is paying S$2,400 per square foot for the 1998-vintage office block, which has a net leasable area of 86,200 square feet (8,008 square metres) across ten storeys of office space and ground floor retail, plus two floors of parking.

Occupying a 17,035 square foot commercial site at Anson Road and Bernam Street within a five minute walk of the Tanjong Pagar metro station, Anson House has 77 years left on a 99 year leasehold and a gross plot ratio of 5.6.

The occupancy rate in the building is close to 80 percent at an average monthly rent of around S$7.50 per square foot, giving the transaction an initial net yield of roughly two percent, according to local media reports. Key tenants in the tower include electronics manufacturer Sanyo, steel and mining multinational ArcelorMittal and US conglomerate United Technologies.

Hong Kong PE Firm Still a Big Buyer

This latest acquisition by Arch Capital Management follows a series of asset purchases in Hong Kong and Australia by the company headed by veteran real estate investor Richard Yue.

Just last month, Arch Capital Management is said to have purchased a retail podium that once housed Hong Kong Island’s fabled Tonnochy Ballroom in Wan Chai for HK$892 million ($114 million), with the fund manager paying just over HK$29,700 per square foot for the 30,000 square foot building on Jaffe Road.

In April, Arch had acquired a 102,177 square foot  office building at 69 Jervois Street in Hong Kong for around HK$1.9 billion, paying around HK$18,595 per square foot.

That transaction was preceded a month earlier by news that the fund manager had purchased a 95 percent stake in an office building in Sydney for around A$45 million ($31 million), with the goal of upgrading the property at 68 Alfred Street.

Savills Sells Off Last of SEB Assets

Savills Investment Management is selling what is reported to be the company’s sole asset in Singapore after the real estate fund management affiliate of London-based property consultancy Savills had earlier sold off a pair of commercial assets that had been acquired by SEB Immovest before the European firm was taken over by SIM.

In November 2016 Savills Investment Management sold 77 Robinson Road to CLSA Capital Partners for S$530.8 million after holding the the 293,265 square foot property for ten years. CLSA resold that office asset in February of this year to Gaw Capital Partners for S$710 million.

Also in 2016 Savills IM sold a 60 percent stake in the Chinatown Point commercial complex to Perennial Real Estate Holdings and Singapore Press Holdings, which took a 40 percent and 20 percent interest respectively based on an agreed property value of S$442.5 million for property, which includes a 25-storey strata-title office tower above a six-storey retail podium.  In April of this year Perennial and SPH agreed to sell that complex in the city’s Chinatown precinct for S$520 million.

Singapore Assets Changing Hands as Rents Rise

Colliers International reported ten days ago that Grade A office rents in Singapore’s central business district had hit a ten-year high in the second quarter of this year, growing over 12 percent compared to the same period of 2018 to reach an average of S$9.93 per square foot per month.

With rising rents driving demand, local real estate investment house Sun Venture just five days ago bought 71 Robinson Road from a unit of Germany’s Commerzbank for S$744 million, paying roughly S$2,756 per square foot for the 237,644 square foot property.

Two days before that deal, Gaw Capital and Allianz announced that they had paired up to buy the Duo complex in Singapore’s Bugis area for S$1.6 billion, netting the new owners 557,972 square feet of office tower and retail gallery for S$2,590 per square foot.