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Singapore-based ARA Asset Management and UK property firm Chelsfield have formed a 50:50 joint venture to buy Manulife Centre at 51 Bras Basah Road for about $555.5 million, reported the Business Times.
The selling price works out to $2,305 psf based on the 11-storey commercial building’s net lettable area of more than 241,000 sq ft.
The property is being sold by property developer City Developments Limited (CDL) and Alpha Asia Macro Trends Fund II (AAMTF II), an entity overseen by Alpha Investment Partners. The asset was one of three properties divested by CDL through a partnership with AAMTF under a “profit participation securities” (PPS) in December 2015 that valued at property at $487.5 million.
In particular, Manulife Centre contains 241,000 sq ft of office and retail space on a site with a remaining lease of 96 years. There’s a ground floor retail podium, as well as spacious floor plates averaging 23,000 sq ft, giving the property a competitive edge over other office buildings in the vicinity, said the new owners.
Although it is located on the outskirts of the city, it is close to the Orchard corridor in the Bras Basah precinct and is within walking distance to two MRT stations – Bras Basah along the Circle Line and Bencoolen on the Downtown Line.
According to the buyers, they intend to renovate the property into a unique lifestyle-based workplace in a bid to “unlock potential upside through positive rental reversion”.
In fact, the lease of the anchor tenant Manulife Singapore, which occupies around 100,000 sq ft, will expire soon. This provides the new owners with an opportunity to carry out an asset enhancement initiative (AEI).
“Prime office rents (in Singapore) are expected to rise between 20 percent and 25 percent from 2018 to 2020 on the back of stable demand and tightening supply,” said the buyers when explaining the rationale of the acquisition.
“With the tightening of quality office supply, coupled with rising demand from occupiers, we believe that the Singapore commercial market is poised to deliver robust growth over the next few years,” noted Ng Beng Tiong, CEO of ARA Private Funds.
Photo: CDL
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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