The office tower at 79 Robinson Road in Singapore’s downtown core officially has new owners and a new name after the sale of the year-and-a-half-old property by CapitaLand Investment and its Japanese partners.
CapitaLand Integrated Commercial Trust and a private fund managed by the Temasek Holdings-backed giant, CapitaLand Open End Real Estate Fund, have completed their S$1.26 billion ($930 million) purchase of the 29-storey tower last Wednesday, CICT said in a filing with the Singapore Exchange.
CapitaLand Investment’s partners, Mitsui and Tokyo Tatemono, which backed the project’s development, exited together with the Singaporean firm, with CICT taking a 70 percent stake under the new ownership scheme and COREF the remaining 30 percent.
The new partnership also obtained approval to change the name of the property to CapitaSky, in line with existing local landmarks like the recently completed CapitaSpring integrated development and sustainability showpiece CapitaGreen.
From Sky to Underground
Located on the site of the former CPF Building across the road from the Tanjong Pagar MRT station, CapitaSky will eventually have a direct underground connection to the transit hub. The tower, which has 45 years left on its 99-year land tenure, was acquired at a 4 percent yield on a net property income basis and has a weighted average lease expiry period of 5.8 years.
Ascendas-Singbridge had acquired the project for S$550 million in 2015, before it later merged with CapitaLand. CapitaLand Investment, which anticipates S$391 million in proceeds and a realised gain of S$72 million on the transaction, will continue to receive recurring income by providing asset and property management services to the new owners.
CapitaLand Investment’s sponsored private fund COREF has a mix of Asian and European institutional investors and received capital commitments worth almost $500 million at its first closing. The vehicle, in which the Singaporean fund manager has a 10 percent stake, is aiming to raise up to $1.5 billion.
The little-known fund had already been seeded with stakes in a pair of office assets in Yokohama, including the 17-storey Yokohama Blue Avenue building and the 1993-vintage Sun Hamada office block. With CapitaSky added to its assets, the fund’s portfolio has a combined gross asset value of $490 million.
Also last week, the CICT-COREF partnership entered into an agreement to purchase the equipment for the car park system used at CapitaSky from a subsidiary of CapitaLand Investment for S$178,206.34.
The subsidiary, CapitaLand Commercial Management, is responsible for the maintenance of the car park and has a revenue-sharing arrangement with the new owners. Following the purchase, CICT and COREF will own the system and will be entitled to receive the full revenue from the car park. The partners will also take over the maintenance of the car park.
The deal conforms to the current arrangement for most of the office properties in CICT’s Singapore portfolio, where CICT or the relevant property-holding entity holds direct ownership of the car park system, the trust’s manager said.
With the acquisition of CapitaSky concluded, CICT now has an interest in 25 properties in Singapore, Australia and Germany with a total portfolio value of S$23.8 billion.