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After receiving several inquiries about the property, a consortium led by Perennial Real Estate Holdings is mulling an en bloc sale of AXA Tower (pictured) in Shenton Way for $1.65 billion, reported the Straits Times.
Based on the property’s total strata area of 767,358 sq ft, the price works out to around $2,150 psf after renovation work, which is slated for completion in 2019.
Perennial noted that the 767,358 sq ft space excludes areas sold since its sale of selective floors at end-2016.
Considering the fully-debt funded renovation cost of $140 million, which will be borne by the new owner, the tower’s strata value post-renovation would stand at around $2,333 psf.
A predominantly office integrated development, AXA Tower is 41.3 percent owned by Perennial and HPRY Holdings – a fully-owned investment vehicle by Perennial chairman Kuok Khoon Hong – while the remaining stakes are held by investors who wished not to be identified.
The consortium is looking to appoint CBRE and JLL as joint marketing agents.
“The sentiment towards the Singapore office investment market has been improving as witnessed by the rising prices paid for office buildings and commercial land tenders,” said Jeremy Lake, executive director of capital markets, Singapore at CBRE.
“Developers and investors are actively looking for opportunities to position themselves for the recovery.”
JLL’s head of Singapore capital markets, Greg Hyland, also noted an increased interest “from foreign buyers who see the relative value of the Singapore commercial market”.
“Although the transaction size is relatively large at $1.65 billion, the pricing on a psf basis is attractive, given that AXA Tower is an iconic Singapore building,” he said.
AXA Tower is undergoing renovation work, which includes constructing a 32,000 sq ft two-storey annex building fronting Maxwell Road, upgrading lifts and increasing the retail podium space to around 60,000 sq ft.
With the lease expiring in July 2081, the 50-storey tower is connected through an underground link to Tanjong Pagar MRT station as well as the upcoming Prince Edward station, expected to be completed in 2025.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg
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