PGIM Nears Sell-Out of Tanjong Pagar Office Project in Singapore

PGIM Real Estate has sold three more floors in a downtown Singapore office project to near a sell-out of the property near Tanjong Pagar.

The US investment manager sold the 14,252 square feet (1,324 square metres) of space for a total of S$55.8 million ($43.4 million), according to sources familiar with the transaction who spoke with Mingtiandi, achieving an average of over S$3915 per square foot in the property at 108 Robinson Road.

The price achieved for floors eight, 11 and 12 in the 12-storey, freehold office block showed a mark-up from deals closed last year and left just two units in the building unsold. PGIM representatives attributed the deals to upgrades made to the 1970’s vintage property after the asset manager acquired it for S$143 million in 2021.

“The strong sales momentum reflects the high quality of the newly refurbished freehold office property and the success of our value-add investment strategy,” said David Fassbender, deputy head of Asia Pacific and senior portfolio manager of the Asia Pacific value-add strategies at PGIM Real Estate.

Strata Stays Strong

PGIM’s buyer for the three floors is local Buddhist organisation Kwan Im Thong Hood Cho Temple, with trustees of the organisation having been granted and later exercising an option to purchase the properties in a deal brokered by local agency SRI Capital Market. News of the transaction was first reported by the Business Times.

With PGIM having kicked off its campaign to sell 108 Robinson Road on a strata title basis at the start of last year, the two remaining units include a ground floor retail space, according to a company representative, with the third floor also said to remain available.

The buyer paid S$18.7 million for the 4,735 square foot top floor in the property, while the 4,758 square foot 11th floor sold for S$18.66 million and the equivalent-sized eighth floor sold for S$18.4 million.  

Situated between Raffles Place and Tanjong Pagar MRT stations in Singapore’s traditional business district, 108 Robinson Road has appealed to owner-occupiers looking for a prestige address for their businesses, as well as to investors attracted to the stability of core assets.

“Freehold office real estate in Singapore CBD are a rare and resilient asset class, which eliminate the risk of lease expiry, making the investment ideal for investors seeking both capital growth and generational wealth preservation.” said Low Choon Sin, managing partner of SRI Capital Market.

Knight Frank said in a report last month that it expects prices for strata office assets in core locations to rise 1 to 2 percent this year, despite challenging conditions brought on by the trade war.

“Interest in strata office remains strong, especially from private capital. There remains a general lack of quality freehold strata office in the CBD, which is the most sought after,” Galven Tan, chief executive of Knight Frank Singapore told Mingtiandi.

Selling Floor by Floor

Following its 2021 acquisition of 108 Robinson Road, PGIM upgraded the facade, installed rooftop photovoltaic panels and overhauled the mechanical and electrical systems, with the property having achieved Platinum certification under Singapore’s Green Mark regimen for sustainable buildings following the enhancements.

Last September, PGIM sold the fifth and ninth floors of the building to a buyer said to be from mainland China at approximately S$3,800 ($2,969) per square foot.

Kwan Im Thong Hood Cho Temple is not the only religious organisation to seek solace in the eternal value of Singapore freehold commercial property in recent months, with a local church having acquired a pair of retail properties in a freehold building on Orchard Road in February. 

The Cornerstone Community Church paid a combined S$54.5 million for its space in the Orchard Towers complex on Orchard Road, with plans to open a new house of worship there.