Singapore Office Market

Singapore Office Market To Remain Active In 2022

SINGAPORE – Property experts said the city-state’s office sector performed splendidly during the start of 2022, and the momentum in office transactions is anticipated to continue, reported The Edge on Friday morning (22 April, SGT).

The first four months of the year began with a bang and the local office market has been particularly active, noted Jeremy Lake, Managing Director of investment sales and capital markets at Savills Singapore.

“Singapore’s office market is something that most investors are keen to participate in and for good reason, because the fundamentals are compelling,” he said.

Capital market deals have recovered solidly as investor confidence in Singapore’s prospects further improved in tandem with the reopening of the country’s economy and the removal of travel curbs, added Regina Lim, Head of strategic advisory at JLL Asia Pacific.

“Investors are also encouraged by Singapore’s proactive and transparent approach to managing COVID, which has attracted more global companies to locate their regional headquarters in Singapore.”

One notable office deal is KKR’s S$598 million acquisition of Twenty Anson, a Grade A office building Tanjong Pagar within the city-state’s central business district (CBD). Based on the 20-storey commercial property’s net lettable area (NLA) of 2,06,163 sq ft, the selling price translates to around S$2,900 psf.

The building is said to offer the new owner an opportunity to increase its gross floor area (GFA) by 13 percent, especially in the common area on the 1st floor.

“This latest deal follows the recent spate of transactions in the CBD, where rejuvenation is taking place. It shows investor confidence going beyond core assets,” said Michael Tay, Head of capital markets for Singapore at CBRE, which brokered the office transaction.

The seller, AEW, had originally purchased Twenty Anson for S$516 million in October 2018.

Melvin Chay, Director of capital markets and investment services at Colliers, expects Singapore office deals to “go from strength to strength on the back of rising rents, tight supply, and as several assets become available.”

One major office transaction presently underway is Robinson 77, with its expression of interest (EOI) exercise conducted by joint marketing agents Savills and CBRE closing on 18 April 2022. And the asset received offers from several parties, most of which are believed to be property funds.

The 35-storey Grade-A office building was put on the market for S$898 million, or S$2,925 psf based on its NLA of 306,929 sq ft.

Robinson 77’s current owner is Hong Kong-based private equity firm Gaw Capital Partners, which acquired the commercial property for S$710 million in February 2019. The prior owner, CLSA Capital Partners, held the office tower for 3 years after buying it for S$530.8 million in 2016.

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