Robinson Point Office Tower Launched For Sale At Lower Price
SINGAPORE – VivaCapital has appointed CBRE and Jones Lang LaSalle (JLL) to market the Robinson Point office building and an adjacent hotel via an expression of interest (EOI) exercise, reported The Business Times on Friday morning (20 January, SGT).
According to market chatter, the EOI exercise shall close in early-February, and the seller is open to selling both properties individually or as a bundle.
The news outlet learned that the indicative price for the 21-storey Robinson Point is around S$470 million. But this is lower than the S$500 million paid by VivaCapital to buy the freehold commercial property from investment firm Tuan Sing. That transaction was signed in 2020 and completed in the following year.
VivaCapital’s acquisition price for the office tower translates to around S$3,721 psf based on the asset’s existing net leasable area (NLA). This is the record rate for an entire office building in the city-state, and market watchers reckon that the high price probably considered the asset’s redevelopment potential.
Meanwhile, the neighbouring hospitality property known as Hotel Telegraph has a guide price of S$240 million, which is the same amount VivaCapital paid when it acquired the hotel from Royal Group last year. The price worked out to S$1.8 million per key, which set a new benchmark in hotel room pricing in Singapore.
The high price was probably due to the hotel likely benefiting from the Robinson Point’s redevelopment under the URA’s CBD Incentive Scheme.
Moreover, a VivaCapital representative confirmed that an entity connected to the group has divested 3 neighbouring shophouses at 33, 35 and 37 Tras Street earlier this month. The news outlet understands that the assets were offloaded for S$29 million, down from the S$33.8 million VivaCapital paid to buy them in 2022.
The group’s move to dispose its Singapore assets comes after the October 2022 arrest in Vietnam of Truong My Lan Truong My Lan, a billionaire entrepreneur whom some in business groups believe to be linked with Viva Land Group. Notably, Truong is being investigated for suspected financial fraud.
However, VivaCapital’s representative reiterated on Thursday that Truong is not connected in any way with the group. “Madam Truong My Lan has never had a connection with any operations of Viva Land or VivaCapital in Singapore. She was a business partner in selected projects in Vietnam but never became part of the company in any way.”
Market observers also shared that VivaCapital’s Singapore entities cannot be traced back to Truong.
In addition, VivaCapital’s representative shed more light on the decision to sell the properties over a short holding period. “We were approached by several potential buyers. We are of the view that with rising interest rates and uncertainty in the key markets, global economic growth seems to be slowing down. Inflation is also becoming a huge concern…
“These downside risks have been flagged as a concern by our stakeholders, which led us to consider this route. We take the view that if there is a right buyer, we could consider a divestment opportunity before the economy slows down further.”
Meanwhile, experts shared that the would-be buyers of Robinson Point and/or Hotel Telegraph will likely prefer to buy the properties directly rather than via shares in their holding companies, as the latter would entail taking over a company’s liabilities.
“However, a direct asset purchase would entail payment of 3 percent stamp duty, increasing the acquisition cost for intending buyers. If they were to buy shares in the company that owns the asset, they would pay stamp duty of only 0.2 percent of the company’s net asset value,” explained a real estate expert.
