S$210m sale of Anson House completed

Transaction takes total Singapore office investment sales YTD to S$5.43b, surpassing 2018's S$5.24b

Thu, Aug 15, 2019

KALPANA RASHIWALA


HONG KONG-BASED fund manager Arch Capital Management completed the acquisition of Anson House for S$210 million on Wednesday.

The price works out to S$2,435 per square foot based on the 13-storey building's net lettable area (NLA) of 86,239 sq ft.

This confirms a report in June in The Business Times Weekend, which had cited market watchers tipping Arch Capital Management as the party that was doing exclusive due diligence with a view to buying Anson House for about S$210 million.

The property has been sold by a fund managed by Savills Investment Management (Savills IM), which was formerly known as SEB Asset Management (SEB AM).

Talk in the market is that Arch Capital Management has bought Anson House on behalf of a German fund.

CBRE and Savills Singapore jointly marketed the property through an expression of interest exercise that closed in the first half of this year. CBRE is understood to have introduced Arch Capital to seller Savills IM.

The property stands on a 17,035 sq ft site at the corner of Anson Road and Bernam Street - a stone's throw from Tanjong Pagar MRT Station. It is on a site with 99-year leasehold tenure expiring in March 2096; this leaves about 76.5 years of balance lease.

Anson House was developed about two decades ago by a joint venture between former Singapore Land chairman S P Tao and his Indonesian partner Mackmoor Pte Ltd on a 99-year leasehold site that they bought for S$53.38 million or nearly $560 psf per plot ratio at a state tender.

Tenants in the building include steel heavyweight ArcelorMittal and United Technologies International Corporation-Asia.

The building has 10 office floors, on levels four to 13. The ground floor houses three retail units; levels two and three hold 54 car park lots.

Level four, which was originally also car park space, was converted into office space late last year. Under that revamp, the lobby was spruced up, along with the ground-floor retail areas and the building's toilets, pantries and common corridors.

A BT report in early February stated that the building is about 80 per cent occupied, and the average monthly rental level, based on existing leases, about mid-S$7 psf.

Anson House was Savills IM's last remaining asset in Singapore. It had previously also owned 77 Robinson Road and Chinatown Point mall. Savills IM inherited these three assets as part of Cordea Savills' acquisition of SEB AM in 2015. The business of SEB AM was combined with Cordea Savills and rebranded to Savills IM.

Other recent Singapore office sale transactions include Commerz Real's divestment in late July of 71 Robinson Road from its open-ended property fund hausInvest for S$655 million or S$2,756 psf on NLA to Sun Venture group.

Around the same time, developer M+S Pte Ltd announced the sale of the office and retail space at the Duo mixed development along Beach Road for S$1.575 billion (or S$2,570 psf on NLA) to Allianz Real Estate and Gaw Capital Partners.

Based on data from Savills Singapore, office transactions in Singapore of S$10 million and above in the private sector so far this year have amounted to S$5.43 billion, surpassing the S$5.24 billion for the whole of last year. In 2017, the figure stood at nearly S$7.5 billion.