German Fund Pays $744m For S'pore Office Block

Source : The Straits Times, Apr 29, 2008

Lehman Brothers and the regional arm of Japan-based Kajima have sold an office building development at 71 Robinson Road to a German buyer.

THE residential property sector may be cooling but the office sector is still relatively hot.

RECORD HIGH: The price paid for the Robinson Road building, due to be completed next year, translates to a high of $3,125 psf. -- PHOTO: KAJIMA OVERSEAS ASIA AND LEHMAN BROTHERS

United States investment bank Lehman Brothers and the regional arm of Japan-based Kajima have just sold an office building development at 71 Robinson Road to a German buyer.

The price was a hefty $743.75 million, sources say, though the sum was not officially disclosed.

In October 2006, they had paid just $163.4 million for the site. Last September, the pair said they would spend about $450 million to develop it.

Kajima will complete the building as the contractor before it is delivered to the buyer, German real estate asset manager Commerz Real's real estate fund hausInvest global.

The fully-owned unit of Commerzbank said yesterday that it is buying the site for an undisclosed sum from the partnership of Kajima Overseas Asia and Lehman Brothers. It said it wants to ride on the ongoing growth in Singapore's office sector.

The fund's price translates to a record $3,125 per sq ft (psf), based on 238,000 sq ft of net lettable area. The nearby Hitachi Tower was sold early this year for $811 million or $2,901 psf.

The 15-storey top grade building, in the Central Business District, has a gross floor area of 280,000 sq ft and is due to be completed in the second half of next year.

Jones Lang LaSalle said they had embarked on a global marketing campaign after the sellers appointed them to look for a buyer late last year.

There were other contenders, said its managing director for Singapore and South-east Asia, Mr Chris Fossick. He said they are now in serious talks with a number of parties wishing to lease space in the building.

'There is keen interest in the Singapore office market, particularly from international investment funds which take a medium to long-term view of the market,' said Mr Fossick.

Commerz Real management board member Hans-Joachim Kuehl said they expect to attract rents of about $15 psf.

Commerz Real, which was advised by CB Richard Ellis, is no stranger to the office market in Singapore. Late last year, the same fund hausInvest global bought 78 Shenton Way for $650 million, or $1,857 psf.