US-BASED real estate investment manager AEW is selling 55 Market Street to an indirect wholly-owned Singapore-based real estate unit of Tokyo-based Kajima Corporation, for nearly S$287 million, The Business Times understands.
The price for the 16-storey, 999-year leasehold building in the Raffles Place financial district works out to about S$3,450 per square foot on the net lettable area (NLA) of 83,000-plus sq ft.
Standing on a land area of 6,575 sq ft, 55 Market Street has 15 floors of offices and 2 levels of retail space (on the ground floor and in the basement).
AEW completed a refurbishment of 55 Market Street in early 2020 after acquiring it in 2018 from Frasers Commercial Trust for S$216.8 million or S$3,020 psf based on the NLA of 71,796 sq ft at the time,
Industry sources say that as 55 Market Street is mostly vacant, Kajima’s most immediate priority would probably be to find tenants to fill up the building. However, some observers suggest that later on, Kajima could consider an exit strategy via strata sales of the property.
Cushman & Wakefield is understood to have brokered the deal. It could not be reached for comment.
Under the Urban Redevelopment Authority’s Master Plan 2019, 55 Market Street is on a site zoned for commercial use with 15.0 gross plot ratio. This would allow a maximum gross floor area (GFA) of nearly 98,620 sq ft, which suggests there is about 7,500 sq ft of untapped GFA based on the building’s current GFA of 91,124 sq ft.
The property is a stone’s throw from the Raffles Place MRT interchange station. Telok Ayer station is further away. The sale of 55 Market Street by AEW is expected to be completed soon.
AEW also owns Twenty Anson near Tanjong Pagar MRT station, 27 office floors at 30 Raffles Place (formerly Chevron House), and Admirax, a high-specification, light industrial building in Woodlands.
Last year, Gaw Capital Partners was in exclusive due diligence with a view to buying Twenty Anson for nearly S$600 million from AEW. However, Gaw later decided not to proceed with the purchase.
Nearly S$4.9 billion of Singapore office assets were transacted last year based on data compiled by JLL Research which covers transactions of S$5 million and above involving assets with at least 80 per cent office component.
The figure for the whole of 2020 was S$2.3 billion. In 2019, prior to the Covid outbreak, the figure was S$7.6 billion.
Galven Tan, deputy managing director of investment sales and capital markets at Savills Singapore, said the outlook for the Singapore office investment market is positive, with most investors looking to make acquisitions in 2022.
“There is potentially an under supply of office space due to low vacancy rates and tight new construction pipeline. The impact of work from home may be mitigated due to de-densification and the desire not to share desks” said Tan.
“We expect more office deal flow this year with a few private-equity funds ready to sell,” he added without elaborating.
Word on the street is that Gaw Capital has appointed CBRE and Savills to market Robinson 77 for sale. The indicative price could be close to S$3,000 psf.
Source: https://www.businesstimes.com.sg/real-estate/aew-selling-55-market-street-to-kajima-unit-for-nearly-s287m
