Perennial RE Holdings, Asia RE Income Fund Buy Office Property in Singapore for $766M
By Alex Girda, Associate Editor
As the curtain was ready to draw on 2013, a number of major commercial real estate transactions were completed to beat the buzzer, one of them: Perennial Real Estate Holdings and the Asia Real Estate Income Fund, who paid 766 million to Pacific Star Group for a major office property in Singapore.
TripleOne Somerset office tower, formerly the Singapore Power Building, located in the immediate vicinity of one of the best known areas of the city, Singapore’s Orchard Road shopping district, is a 17-story building that has been under the ownership of the Pacific Star Group since February 2008.
According to Bloomberg.com, the acquisition marks a rising trend in office rent rates with an increase of 4 percent during the fourth quarter of 2013. According to Pacific Star’s website, the building was awarded with the Energy Smart office label by the National Environmental Agency in 2009. The tenant roster at the TripleOne Somerset building includes: Parkway Pantai Ltd. and Petra Foods Ltd., as well as dining and entertainment tenants such as AppleBee’s Neighbourhood Grill & Bar, Italiannies and Sapporo Ramen Sanomaru.
The deal has added to a healthy year for commercial real estate investment, as a report by Jones Lang LaSalle indicates that the worldwide CRE investment volume for 2013 stood at $549 billion. The figure marks a clear improvement over 2012, by a margin of 18 percent. Global markets had a strong fourth quarter with deals totaling $183 billion, marking an impressive 31 percent increase compared to the fourth quarter of 2012. According to the real estate company, the visible volume growth in terms of investment is due to the fact that companies are finally beginning to regain confidence in CRE assets.
Case in point, the aforementioned deal for the TripleOne building in Singapore contributed to a blockbuster year for Asia Pacific as investment grew in 2013 by 26 percent, hitting the $124 billion mark. According to JLL, the growth was driven by the Japanese, Chinese and Australian markets, all of which have seen big increases in investment volumes.