61 Robinson purchased by homegrown private equity group

Citi Commercial Pte Ltd

A 20-STOREY office building at 61 Robinson Road that is nearing the completion of a revamp, is changing hands at S$422 million.

A fund managed by ARA Private Funds, part of ARA Asset Management, is selling the property, previously known as Robinson Centre and now known as 61 Robinson.

The buyer is a fund managed by home-grown private-equity fund management group Rivulets Investments, which was set up only in March 2018.

The price works out to S$2,973 per square foot based on the building's post-refurbishment net lettable area (NLA) of 141,958 sq ft. Prior to the revamp, the NLA was 133,221 sq ft.

There is potential to further raise the NLA by 4,200-plus sq ft to 146,174 sq ft, primarily when multiple units on the same floor are reconfigured as a single unit. Based on this higher NLA figure, the transacted price would translate to S$2,887 psf.

Robinson 61 is on a 15,125 sq ft site with about 74.5 years' balance leasehold tenure.

Savills is thought to have brokered the deal but declined to comment.

Market watchers say the outlook for the Singapore office investment market remains positive.

Rising Grade A rents, low interest rates and excess liquidity are fuelling office prices which are at an all-time high and set to rise further over the next few years.

BT understands that the ongoing asset enhancement works for 61 Robinson undertaken by the seller is expected to cost in the low to mid-S$30 million range.

The refurbishment, slated to complete next month, includes converting level 5 from a car park to retail space. The double-volume lobby on ground level has also been completely ripped out and redone.

Along with this, the building's mechanical and electrical, and air-conditioning and ventilation systems have been enhanced. The common areas in the building have also been spruced up.

Lian Chin Chiang, chief executive officer and co-founder of Rivulets Investments, highlighted that the interior design for 61 Robinson's asset enhancement works was done by Brewin Design Office, which also worked on Capella Hotel, Singapore. "Post-refurbishment, 61 Robinson has a unique luxury hotel vibe," he said.

Besides level 5 - which will be positioned as a destination retail offering potentially featuring fitness/wellness services - there is also space for a few F&B outlets on ground level.

The offices in the building are on 15 floors (from levels six to 20) adding up to about 130,000 sq ft.

The office space per floor ranges from 6,900 sq ft to 9,500 sq ft.

At least half of the office space continues to be occupied during the asset enhancement works, said Mr Lian.

Inclusive of new leases signed (but which have yet to commence), the committed occupancy for 61 Robinson's office space is now in the 60-70 per cent range, he added.

Among notable existing tenants in the building is Apollo Management Singapore, part of US private equity group Apollo Global Management. American global insurance brokerage and risk management services group Arthur J Gallagher recently signed a lease for space in the building.

Michael Sidaway, executive director and co-founder of Rivulets, said that the latest office lease signing at 61 Robinson, involving another tenant, was at a monthly rental of slightly more than S$11 psf; the deal involves a partial floor.

Rivulets is on target to achieving a net yield of at least 3 per cent on a stabilised basis for the 61 Robinson acquisition, he added.

Another of Rivulets' funds owns nearly 80,000 sq ft of strata office space at Prudential Tower near Raffles Place and Telok Ayer MRT stations.

"We are positive on the outlook for the Singapore office market. We've been receiving enquiries from potential North Asian investors who are keen on Singapore real estate," said Mr Lian.

An experienced broker said: "Since Covid-19, Singapore has become an even more popular investment market for foreign investors, and deals in the pipeline will most likely reaffirm this."

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