PGIM Real Estate Nears Sale of Pair of Office Floors on Singapore’s Robinson Road

PGIM Real Estate is closing in on deals to sell a pair of office floors in downtown Singapore after completing renovations on the 12-storey building between Tanjong Pagar and Raffles Place.

“We have received firm offers and are close to sealing deals on two floors at 108 Robinson Road,” a PGIM representative told Mingtiandi on Monday. “The freehold tenure of the building has received strong interest from discerning small businesses, private wealth and family offices who are keen on long-term wealth preservation.”

The negotiations, which were first reported by the Business Times, have come to light after PGIM Real Estate in March kicked off a campaign to market levels 5, 6 and 8 in the 64,286 square foot (5,972 square metre) building at a combined asking price of S$54.6 million ($40.4 million), which equates to S$3,850 per square foot of built area.

While sales of en-bloc commercial properties have slowed in the face of higher interest rates, wealthy individuals and corporate investors have continued to snatch up strata commercial floors and other assets available at lower price quantums, with TE Capital Partners and LaSalle Investment Management last year achieving record high prices as they sold out their Solitaire on Cecil project one bock away from 108 Robinson Road.

Buy, Fix, Sell Floor by Floor

PGIM Real Estate said the three floors currently on the market represent the first phase of its exit from the property it picked up three years ago from local private equity firm Sin Capital Group under its value-add strategy.

With PGIM having paid S$143 million to acquire 108 Robinson, on a per square foot basis, the asking price for the three floors represents a 48 percent markup from that 2021 purchase of what was then known as the Finexis Building.

In the past three years PGIM undertook major renovations of the property including updating its facade and enhancing its sustainability in an initiative completed in June. That programme helped the property earn a Platinum certification under Singapore’s BCA Green Mark Certification scheme.

Located along the Shenton Way-Tanjong Pagar commercial strip, 108 Robinson Road is within 10 minutes’ walk of the Singapore Exchange and of the Telok Ayer, Downtown and Shenton Way MRT stations.

The US-based fund manager did not give a time frame for the sale of the remaining strata space in 108 Robinson Road, which has 11 strata units in total and average floor plates of 4,800 square feet.

CBRE, Savills and SRI Capital are jointly marketing the trio of office floors but representatives of the agencies had not responded to queries from Mingtiandi by the time of publication.

Big Offices, Tough Challenges

PGIM invested in 108 Robinson Road under the fund manager’s Asia Pacific value-add strategy which targets mispriced opportunities in markets with strong investor interest and low levels of supply.

“The limited supply of office properties in the Singapore central business district combined with overseas investment interest make this an attractive opportunity. Our value-add investment strategy was to acquire a property with what we believe to be attractive pricing… we have created an appealing opportunity for future investors [with 108 Robinson Road],” David Fassbender, senior portfolio manager for Asia value-add strategies at PGIM Real Estate, said during the launch of the sales campaign in March.

As the company closes in on the sale of its two strata floors, it has faced bigger challenges marketing larger properties, like 78 Shenton Way, a grade A office complex it acquired in 2018 for S$680 million.

The grade A office property has been on the market since early last year, with PGIM said to be struggling with offers for 78 Shenton Way coming in at prices lower than what the fund manager paid to acquire the property six years ago, according to market sources.

Strata Stays Hot

Singapore’s supply of strata offices has been limited since urban planners restricted strata subdivision of commercial properties in the city-state’s prime business hubs in 2022.

Among the few remaining developments permitted for strata subdivision is VisionCrest Orchard, a commercial building at 103 Penang Road, which is currently being renovated by TE Capital Partners and LaSalle Investment Management. The partners had acquired what was then known as VisionCrest Commercial for S$450 million in a deal closed in January.

Also in January, Top Global, a property firm controlled by Indonesia’s Widjaja family put the second floor of 15 Scotts for sale at S$76 million at the equivalent of S$3,419 per square foot. TE Capital and LaSalle Investment Management achieved values as much as S$4,325 per square foot for their Solitaire on Cecil project.