Brunei Sovereign Fund Buys Stake in Ho Bee Singapore Life Sciences Complex for $205M

Singapore’s commercial real estate is showing signs of a pulse this month with developer Ho Bee Land announcing early Monday that it has agreed to sell a 49 percent stake in a life science complex in the city-state’s One North tech park to a sovereign wealth fund for S$272 million ($205 million).

The buyer of the stake in Ho Bee’s Elementum project is the Brunei Investment Agency, a $73 billion vehicle which manages assets on behalf of the Southeast Asian petro-state, with Singapore-based investment manager 137 Capital Partners having managed the deal on behalf of BIA, according to multiple sources familiar with the transaction who spoke with Mingtiandi. The Brunei Investment Agency had not yet responded to inquiries from Mingtiandi by the time of publication.

With company sources indicating that the project is more than 90 percent occupied after opening in December, Ho Bee Land attributed the investment to the potential for life sciences in Singapore and globally.

“The life sciences sector has witnessed unprecedented growth in recent years, and we are pleased to enter into a strategic partnership with the SWF,” Nicholas Chua, chief executive of Ho Bee Land, said in a statement. “They bring a wealth of experience, and we are well-positioned to explore new growth opportunities together, strengthening our commitment to innovation and excellence.”

The Singapore government has been encouraging development of the country’s life sciences sector and Elementum is anchored by Synapxe (formerly Integrated Health Information Systems), with the Singapore government health technology agency and affiliated organisations taking up around 250,000 square feet (23,226 square metres) of the complex’ 372,000 square feet of lettable area, according to brokerage reports.

Trading at a Premium

The Brunei Investment Agency is paying cash consideration of S$134 million for its stake in the project, with the purchase price representing a S$71.7 million premium to Elementum’s book value as of 31 December. At the stated valuation, the deal is being transacted at the equivalent of S$1,492 per square foot, according to Mingtiandi calculations.

The transaction is expected to be completed on 21 August, with CBRE’s Rimon Ambarchi said to have brokered the deal. Market sources estimated that the 12-storey asset is trading at around a 4 percent yield, based on net property income. 137 Capital, which managed the transaction, is a little-known firm with former Temasek Holdings executive David Tong serving as a managing director, according to LinkedIn.

Standing 12 storeys tall, Elementum is located within a few minutes’ walk of Buona Vista MRT station and next to Ho Bee Land’s Metropolis — an office project which the company completed in 2013.

Elementum has around 280,000 square feet of biomedical business park space, according to its website, and another 50,000 square feet of office accommodation. The project also has 20,000 square feet of ready-to-use lab space and 10,000 square feet dedicated to food and beverage outlets.

Purpose-built for biomedical use, all labs have dedicated exhaust risers to the roof and the project was awarded Green Mark Platinum status under Singapore’s regimen for sustainable buildings.

One North Marches On

The developer had paid S$223.6 million for the rights to develop Elementum in a 2020 land sale by Singapore’s Jurong Town Corporation with the Skidmore Owings Merrill design forming part of its bid.

At the time that its winning bid was announced, Ho Bee Land tied its bet to Singapore government efforts to support development of the life science industry.

“The intent of the development is to spearhead the creation of a new generation of labs that help foster research and discovery,” Ho Bee’s Chua said at the time. “This is timely as the government hopes to incubate more biotech startups in Singapore as part of its drive to transform Singapore into the BMS hub of Asia.”

With the developer having fallen to a S$260 million loss in 2023 due to markdowns in the value of its investment properties, Ho Bee Land pointed to the potential for further cooperation with its friends from Brunei.

“Beyond the immediate investment, this partnership paves the way for broader collaboration, exploring new avenues for strategic growth and development. The combined expertise and resources of the partnership will unlock new growth opportunities and create long-term value for all stakeholders,” the company said in its statement.

As traditional office space suffers from falling occupancy, biomedical and life science projects have become top targets for investors globally, with Warburg Pincus and Australia’s Lendlease last week announcing completion of a joint venture aimed at acquiring, developing and operating life sciences projects in Asia Pacific.

Located near the National University of Singapore campus, the master-planned One North area has become a hub for life science and other large footprint office investments with Blackstone having purchased the Sandcrawler building in the area for S$175.8 million in 2021.