Tycoon offers Sing$560m for building in Singapore’s CBD

Singapore-listed investment holding firm MYP on Wednesday said Tahir had signed a letter of intent to acquire the 999-year leasehold Grade A office building in |the heart of the central business district (CBD) from Sun Venture Group.
Sun Venture Group would bank a sizeable gain, since it bought the 28-storey block from Straits Trading Company for $450 million, or about $2,800psf, in September 2014.
Tahir, who goes by one name, is the founder of Indonesia’s Mayapada Group. His son Jonathan Tahir is the executive chairman of MYP.
Analysts said the $560 million price works out to a record of $3,520psf, based on the net lettable area of 158,897sf. This would surpass the $3,125psf for 71, Robinson Road, which was sold in 2008.
The offer comes amid softer demand from tenants and concerns over rising office supply putting pressure on rentals.
“There aren’t many Raffles Place office buildings for sale. It is the price you have to pay if you want to stake a claim in the area,” Chestertons managing director Donald Han said.
Knight Frank Singapore said that while the psf price may be high, the overall investment at $560 million is still “palatable”.
Knight Frank’s research head Alice Tan said that in the CBD it is hard to get an office property with a long lease and be able to buy it on a single ownership basis.
MYP said in a stock exchange filing that 1 per cent of the purchase price of $560 million has been paid as a deposit, adding that the firm “is conducting due diligence with a view to signing a definitive agreement”.
The deal is expected to be funded via “internal resources, bank borrowings and/or fund-raising in the capital markets”.
Tan said she believes the Indonesian buyer is probably buying it for the location and the long lease, and he is going in with a longer investment horizon.
MYP has two freehold commercial properties in Singapore – ABI Plaza on Keppel Road and MYP Plaza on Cecil Street.
“I think the proposed acquisition is strategic – in that they are moving from assets on the fringe of the financial district to the heart of the CBD.
“The Straits Trading Building will be a crown jewel in their commercial portfolio,” Han added.