JLL, Savills Appointed To Market Lazada One Office Bldg

SINGAPORE – Following a report that the Lazada One office block along 51 Bras Basah Road is up for grabs for S$800 million, sources revealed that Savills and Jones Lang LaSalle (JLL) have been engaged to market the commercial property, Mingtiandi reported on Monday evening (20 December, SGT).

Last week’s report revealed that the asset’s 50:50 owners, Singapore’s ARA Asset Management and UK-based property group Chelsfield, are seeking S$800 million (S$3,319 psf) for the office property spanning 241,000 sq ft.

While the sales exercise is still in the exploratory phase, if the owners manage to sell the asset at such price, it would represent a 44 percent markup, as they acquired the commercial property for S$555.5 million from City Developments Ltd (CDL) in early-2019.

Notably, the owners have put the 11-storey Lazada One on the market after analysts recently reported a sustained rebound in premium office rents, on the back of rising demand from multinational and regional tech firms competing for office space in Singapore, the wealthiest city in the ASEAN region.

In January 2021, the office building received a vote of confidence when Alibaba and its e-commerce subsidiary Lazada agreed to be an anchor tenant by leasing 60 percent of the space or 140,000 sq ft in total in the commercial property, pushing the occupancy to nearly 100 percent.

Before the latest leasing deal was inked, the asset was known as Manulife Centre. Under the 6-year rental agreement, Alibaba is said to be forking out S$8 psf in monthly rent for the commercial property that is just a stroll from the Bencoolen and Bras Basah MRT stations.

While ARA refused to comment on the report, Stephen Tang, who heads value-add and opportunistic real estate for Asia Pacific at ARA’s private fund division, stated in April 2021 that his team have carried out an asset enhancement initiative (AEI) on Lazada One to reposition it and make it more suitable for current and future occupants.

Interestingly, ARA adopted a similar disposal strategy for the 61 Robinson Road office building, which was divested after being upgraded to Rivulets Investments in September 2021 for S$422 million – a 24 percent premium over the price paid by a fund managed by ARA Private Funds about 19 months earlier.

“What tenants require today may not be exactly the same as what was required 3-4 years ago, so when we do the AEI, and we look for the acquisition, we really see what’s going on locally. How the tenants are viewing it, how the building is positioned vis-a-vis that particular submarket. And try to position it so that it competes on the level that probably is not… from the first requirement,” Tang commented in a forum hosted by Mingtiandi earlier this year.