Tuesday, March 22, 2011

One Finlayson Green sold to private group for $227m

(SINGAPORE) A deal has been signed for the sale of One Finlayson Green, a freehold office block in Raffles Place for $227 million or about $2,520 per square foot on its net lettable area of about 89,950 sq ft.


The building is being sold through private treaty by a fund managed by Singapore-based Lucrum Capital to a group of private investors registered under a British Virgin Islands vehicle.


'The buyer intends to keep the building for long-term investment,' said Stella Hoh, national director and head of investments at Jones Lang LaSalle, which secured the buyer.


Word on the street is that Singapore-listed K-Reit Asia was keen on the property and even did due diligence with a view to buying One Finlayson Green at a price said to be about $221 million. However, when the due diligence period expired on March 11, a contract was not entered into; instead the seller held discussions with another party - the private investors under the BVI-registered entity - who offered a higher price.


The Lucrum-managed fund bought the 19-storey property in March last year for about $145 million under a deal effected through a sale of shares in the company owning the asset.


After taking into account fees and other expenses, the final cost to the Lucrum fund was thought to be about $155-157 million, according to earlier reports. Lucrum bought the asset from UK-based property fund group Develica, which in turn had purchased it from Singapore's Hong Leong Group in 2007 for $230.88 million.


One Finlayson Green was developed in 1994. The retail unit on the first and second floors is occupied by AIA. The building has also obtained in-principle approval from the authorities for strata titling on a floor-by-floor basis. The typical strata-titled unit is about 6,437 sq ft.


The expression of interest exercise for One Finlayson Green launched late last year drew good interest from potential buyers keen on buying strata-titled units in the property as well as the entire building, said Ms Hoh.


The expression of interest was handled by JLL (for Singapore and South-east Asia) and Colliers International (for North Asia).


One Finlayson Green is at least the third deal of a Singapore commercial building brokered by Jones Lang LaSalle this year after Singapore Technologies Building in Tanjong Pagar and PoMo at Selegie Road.


On Sunday, it was announced that Alpha Investment Partners' Macro Trends Fund and NTUC Income have agreed to buy Capital Square at Church Street for $889 million or about $2,300 psf on net lettable area - marking the biggest Singapore office transaction so far this year. Cushman & Wakefield brokered that transaction. The seller is Ergo Insurance Group - a subsidiary of reinsurer Munich Re.

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