Commerzbank unit buys 71 Robinson Rd for $743.8m

Business Times - April 29, 2008

Commerzbank unit buys 71 Robinson Rd for $743.8m

Commerzbank unit buys 71 Robinson Rd for $743.8m – 

[SINGAPORE] Cornmerz Re­al, a fully-owned subsidiary of Germany’s Commerz­bank, has bought 71 Robin­son Road, setting a record in the process and perhaps heralding a new wave of of­fice deals.
The price paid fpr the building, which was owned by a partnership of Lehman Brothers and Kajima Over­seas Asia, was not dis­closed by Commerz Real. But sources say it was $3,125 per sq ft of net letta­ble area (NLA), or $7 43.8 million. This is 7. 7 per cent higher than the $2,900 psf of NLA paid for Hitachi Tower in January.
Lehman/Kajima ac­quired the building in Octo­ber 2006 from SingTel for $163.4 million. A year lat­er, the partnership said it would spend about $450 million, including the land cost of $163.4 million, to re­develop 71 Robinson Road into a 280,000 sq ft (gross floor area) building to be completed by mid-2009.
While the selling price represents a healthy capital appreciation, it is under-stood that the acquisition comes with a coupon pay­ment by Lehman/Kajima to Cornmerz Real amounting to 4.5 per cent – or about the investment yield for Cornmerz Real for the dura­tion of construction.
Jones Lang LaSalle (JLL) was appointed by Lehman/ Kajima to market the devel­opment ifl late-2007. JLL managing director (SEA) Chris Fossick said market­ing was done globally, with interest from both Singa­pore and international · funds.
In terms of leasing, Mr Fossick said there are no pre-commitments yet but talks are going on with sev­eral parties.
Commerz Real was ad­vised by CB Richard Ellis. Commerz Real manage­ment board member Hans­Joachim Kuehl said: “We have seen strong interest from major financial institu­tions in the development and expect to attract rents in the region of $15 psf.”
The acquisition was made by Commerz Real’ s real estate fund hausinvest global which also owns 78 Shenton Way, bought in De­cember 2007 for $650 mil­lion or $1,857 psf of NLA.
It is worth noting that 78 Shenton Way was sold by a joint venture between Cred­it Suisse and CLSA funds af­ter they paid $348.5 million for it earlier in the same year.
JLL’s Mr Fossick be­lieves this year could see more such assets held by opportunistic funds go to core funds like Commerz Real.
By his reckoning, 2007 saw core funds acquire at least 10 office assets held by opportunistic funds. Larger deals include that by CLSA, which sold the SIA Building to German pension fund SEB.
Mr Fossick believes at least another 13 office as­sets could be targets for core funds, including DBS Towers 1 and 2. “We could look back on 2008 and still see quite a lot of transac­tions despite the global credit crunch,” he said.

 

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