The former SIA Building in Robinson Road was offered for sale yesterday at a guide price of $575 million.
Marketing agent CBRE said the price works out to $1,960 per square foot (psf) based on a net lettable area of 293,269 square feet. The net yield will be around 3.5 per cent, it added.
The 35-storey block with three ground-floor retail units was developed by Singapore Airlines (SIA) and completed in 1997. It has a 99-year tenure dating from 1994.
“It is very timely to bring 77 Robinson Road to the market now because sentiment towards the office market has improved,” said CBRE executive director for investment properties Jeremy Lake.
The improved sentiment comes on the back of a pickup in leasing activity in upcoming office buildings Marina One and Guoco Tower as well as recent high-profile deals that “have stirred the market and made investors sit up and relook their investment strategy”, he added.
Mr Lake noted: “Inevitably some investors will be bringing forward their acquisition time frame for the Singapore office market.”
This will be the third time that 77 Robinson Road has been put up for sale by its owner – the former SEB Investment, now known as Savills Fund Management – since it acquired the property about nine years ago. Reports showed that it was offered for sale in 2011 with a guide price of about $678 million (about $2,300 psf), and again in 2015 with a pricing expectation of $649 million (about $2,200 psf).
SEB bought the building in April 2007 for $526 million or $1,783 psf from a CLSA Capital Partners-linked fund.
The occupancy rate at 77 Robinson Road is close to 90 per cent, with tenants including sports brand adidas, communications agency Dentsu Singapore, DVB Bank and Japan-based Sojitz Asia.
CBRE expects the target market for the building to be “wide and diverse”. Separately, another office property is said to have caught the eye of investors, according to a Bloomberg report yesterday.
ARA Asset Management is reportedly seeking to acquire the 50 per cent stake in Capital Square tower put up for sale by Alpha Investment Partners, the investment arm of Keppel Land.
Citing Chestertons managing director Donald Han, the report estimated that the building could fetch $2,500 psf, valuing the 50 per cent stake at about $415 million.
Tenants at the 16-storey Capital Square in Raffles Place include Morgan Stanley and Citigroup.