Commerz Real, the property arm of German Commerzbank, has sold its 71 Robinson Road office in Singapore to a Sun Venture subsidiary for S$655m (US$475.7m).
SV Robinson, a real estate investment company and a member of the Sun Venture group, acquired the 13-storey property from Commerz Real’s open-ended real estate fund, hausInvest, the seller announced.
The fully-let property offers 22,000 sq.m. of office space in the city centre and counts WeWork as one of its tenants, having occupied three floors in the building since 2017.
Commerz Real bought the then project development in 2008.
“Asia remains an interesting market for new acquisitions for hausInvest,” said Henning Koch, global head of transaction management at Commerz Real.
What the market says
Chris Fossick, JLL CEO Singapore and Southeast Asia, said Singapore office transaction volumes were close to $4.6bn so far this year and were likely to reach a new decade high in 2019.
“Demand for office space in Singapore is driven by the depth and diversity of the Singapore economy – in particular technology, professional services and the financial services industries are thriving,” he said.
“It is also a validation of the re-generation of the Tanjong Pagar/Robinson Road precinct that has been rejuvenated by new infrastructure and development.”
Fossick noted there was a deep pool of capital chasing opportunities for commercial space in Singapore, with 71 Robinson Rd attracting strong bidding from a mostly institutional investor base with core/core+ investment mandates.
“A big part of the draw for investors are rising office rents,” the CEO said. “Singapore’s prime office rents are expected to grow 33% between 2019 and 2022 – the highest globally, according to data from JLL.”
“Supply of office space in the next few years is expected to be tight, as owners of older office buildings capitalize on recent government planning incentives to redevelop their assets for new integrated life-work-play buildings. The ‘CBD incentive program’ gives building owners in the core CBD precinct potential upside on future redevelopment.”
JLL, CBRE, Dentons and EY advised Commerz Real on the sale. Commerz Real has €31bn of assets under management.