Savills Investment Management is looking to offload 77 Robinson Road, an office building in Singapore’s central business district formerly known as the Singapore Airlines building, for around S$575 million (€384 million; $423 million).
Property consultancy CBRE has been tasked with handling the sale process and based on the property’s 293,269 square feet of net lettable area the guide price equates to S$1,960 per square foot, reflecting a net annual yield of around 3.5 percent.
The relaunched sale process is the third attempt by the property's owner, Savills IM that took ownership of the office when it acquired the building’s owner SEB Asset Management late last year, to offload the building. In September last year DTZ had reportedly being appointed as the marketing agent for the property and the asking price was said to be around S$650 million. A few years prior in 2011, it was Colliers who was believed to have brought the property to the market on behalf of SEB Asset Management.
The firm had acquired 77 Robinson Road in 2007. The 43-story office building has three ground floor retail units. According to CBRE the occupancy is close to 90 percent with Adidas and Dentsu among the major tenants.
The sale process comes weeks after the much-anticipated sale of Asia Square to the Qatar Investment Authority for S$3.4 billion. The deal, pegged to be the largest ever property buy by a state fund in Singapore, is said to have spurred the market into action.
“It is very timely to bring 77 Robinson Road to the market now because sentiment towards the office market has improved for two reasons; one, there has been a pickup in leasing activity in Marina One and Guoco Tower and the leasing market is getting traction after a standoff between landlords and tenants,” said Jeremy Lake, executive director, investment properties for CBRE Singapore.
“And two, the recent sales of Asia Square Tower 1 [sold at S$3.38 billion], Straits Trading Building [sold at S$560 million] and Capitagreen [60 percent sold at S$960 million] have stirred the market and made investors sit up and re-look at their investment strategy. Inevitably some investors will be bringing forward their acquisition time frame for the Singapore office market.”