Angelo Gordon JV Scoops Up Singapore High-Rise for $396M

Keppel REIT has netted significant capital gains following the sale of the 250,000-square-foot Bugis Junction Towers.
Bugis Junction Towers. Image via Google Street View

Acting on behalf of Singapore-based Keppel REIT, Cushman & Wakefield has arranged the sale of Bugis Junction Towers, an approximately 250,000-square-foot, premier office building in Singapore. Angelo Gordon and TCRE Partners, identified together in a Singapore Exchange announcement as Village Prop Pte Ltd., purchased the 100 percent occupied property for $396 million.

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Located at 230 Victoria St., Bugis Junction Towers sits within the Bugis Junction integrated mixed-use development and has a 99-year leasehold land tenure that expires in 2089. The 15-story building welcomed its first tenants in 1994 and today, it’s home to roughly 20 businesses, including government agency Enterprise Singapore, InterContinental Hotels Group and coworking space provider Ucommune. The property also features two ground-level retail units designated for food & beverage operations.

Keppel had owned Bugis Junction Towers since 2006, when it purchased the asset for S$159.5 million, or approximately $116.5 million in today’s currency. The sale to Village Prop marks a whopping 243.2 percent over the original purchase price.

Enticing investors

Given the current state of the office market in Singapore, it’s likely that Cushman & Wakefield fielded more than a few offers for Bugis Junction Towers. Office supply in the city is expected to remain low through 2021, and strong demand continues, with coworking and tech companies leading the way and the financial sector holding steady, according to a third quarter 2019 report by Cushman & Wakefield. Additionally, office occupancy costs are still on the rise in leading cities around the world and Singapore is no exception, as prices rise amid limited space availability.

Singapore’s highly desirable office market fundamentals are attracting investors like bees to honey. In the third quarter, investment volume escalated, reaching nearly $6.3 billion, the highest of any other real estate sector. The long list of trades includes Allianz Real Estate and Gaw Capital’s acquisition of DUO Tower and DUO Galleria, a Class A office asset with ancillary retail, for S$1.6 billion, or roughly $1.2 billion; the deal marked the largest office transaction in Singapore year-to-date.