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Published February 6, 2012

Twenty Anson close to being sold for over $400m

Price negotiated said to be around $2,120 psf: sources

By KALPANA RASHIWALA


(SINGAPORE) Discussions are on-going for the potential sale of Twenty Anson near Tanjong Pagar MRT Station at over $400 million, with CapitaCommercial Trust (CCT) tipped as a potential buyer.


Twenty Anson: The 20-storey office block, which has Platinum LEED certification, is fully leased

The building, on a site with a remaining lease of about 95 years, is being sold by LaSalle Investment Management Asia Opportunity III fund.

The price being discussed for the 20-storey Grade A office tower, which was completed in late 2009, is said to be around $2,120 per square foot of net lettable area without income support - which would translate to an absolute amount of about $430 million.

With income support, the price will be higher, possibly closer to the $2,200 psf mark or around $446 million, BT understands.

Market watchers say that a deal, if it materialises, will be the first transaction of a new Grade A office block that does not involve a related party transaction in nearly four years, after 71 Robinson Road, which was sold for a record $3,125 psf in April 2008.

Twenty Anson, a Platinum LEED certified building, has a total net lettable area of about 202,700 sq ft and floor plates of about 13,000 sq ft.

Market watchers estimate the net yield for the transaction may be around the 3 per cent level without income support and perhaps closer to 4 per cent inclusive of income support.

The asset offers upside income potential from lease renewals. Blackrock, Toyota and Getco Asia are among its tenants.

Most of the current leases at Twenty Anson are said to have started in 2010 with renewals expected in 2013/2014, which leaves room for positive rent reversion.

Market watchers estimate that based on existing leases, the current average monthly rental from the property could be around $6.50 per square foot a month - lower than the current market rental rate of about $8 psf for a Grade A building in the location.

CCT, which is rumoured to be the buyer of Twenty Anson, in 2010 sold the freehold Robinson Point - about 600 metres from Twenty Anson - for $203.25 million or $1,527 psf, probably because it saw little upside from the asset, which is built up to the site's maximum potential. Also, Robinson Point is not a Grade A office block.

US property fund manager AEW, which picked up the 21-storey Robinson Point from CCT, put it on the market late last year with a price expectation of about $2,300-2,350 psf. The asset is still available.

For CCT, its divestment of Robinson Point was one of the factors that caused it to suffer a drop in rental income and post a 4 per cent drop in distribution per unit to 7.52 cents for full-year 2011. Other factors included the divestment of StarHub Centre, lower revenue from Six Battery Road and the redevelopment of its Market Street Car Park site into a Grade A office project.