Lehman plans $450m Singapore office development

After moving the its regional real estate headquarters to the city state, the firm will make its first direct property investment in the country through a partnership with Japanese property developer Kajima.

Lehman Brothers has partnered with Japanese developer Kajima to jointly invest S$450 million ($297 million) in the development of an office building in downtown Singapore.

The 50-50 joint venture will be the first direct property investment for Lehman Brothers in the country.

The 15-story, 280,000 square foot project at 71 Robinson Road is expected to be ready by 2009.

Lehman Brothers said it has plans to make this just the first of several investments in Singapore real estate. The group recently moved the operating headquarters for its Global Real Estate Group to Singapore from Bangkok, and it reportedly has plans to double its team there to 12 from the current six employees.

Lehman Brothers’ global real estate group has about $7.3 billion of property investments in the region, $5 billion of it in Japan.

Singapore is currently in a strong position for growth in the office sector. The vacancy rate for prime Grade A office space in the city is less than 1.65 percent, and according to Jones Lang LaSalle the net demand for office space will reach 5.1 million square feet over the next three years.

Earlier this week it was announced that Oaktree Capital Management plans to buy Singapore-based Pangaea Capital Management to lead its real estate efforts in Asia.