Perennial Ponders $1.2B Sale of Singapore Skyscraper

A group of investors led by Perennial Real Estate Holdings is contemplating the sale of the AXA Tower, the city's sixth-tallest building located in the central business district.

Perennial Real Estate Holdings Ltd. and its consortium of investors, known as the Perennial-led Consortium, are considering the collective sale of the AXA Tower in Singapore for $1.2 billion, or about $1,585 per square foot, based on its post-asset enhancement initiative size of about 767,358 square feet. The tower is set to undergo a $103 million renovation that is fully debt-funded and will be transferred to the potential new buyer. Upon the renovation’s completion in 2019, the value per floor of the property would be some $1,720 per square foot. According to the company, there have been a number of inquiries about the building. 

The AXA Tower in Singapore
The AXA Tower in Singapore

Located at 8 Shenton Way, the 50-story building is a predominantly office development within Singapre’s CBD and is one of the tallest skyscrapers in the city. AXA Tower provides transport connectivity with underground access to the Tanjong Pagar Mass Rapid Transit Station and the upcoming Prince Edward MRT Station, which is expected to be completed in 2025. The asset is also in close proximity to the Shenton Way Bus Terminal and offers quick access to major expressways. The building is anchored by multinational tenants such as AXA Insurance, BOC Aviation, Red Hat Asia Pacific and Lazada Group. The property features unobstructed views of Marina Bay, Singapore Strait, the CBD, Tanjong Pagar precinct and Chinatown Heritage District. 

Upgrades underway

The development has received strata subdivision approval, which provides the flexibility for the asset to be held for long-term investment or for sale as individual strata units. Improvements that are currently underway will add about 106,000 square feet to the property. 

Other upgrades include increasing the footprint of the retail space to about 60,000 square feet, building a new 32,000-square-foot, two-story property fronting Maxwell Road to house medical suites, improving the efficiency of the offices, upgrading the office lifts, elevating the main entrance to street-level facing Shenton Way with a new office lobby, as well as enhancing the building’s overall connectivity and drop-off points.

The strata sale of selective office floors at AXA Tower was officially launched at the end of 2016. To date, the total strata sales achieved at AXA Tower total some$30 million and the average transacted price of the office units was about $1,887 per square foot.

The Perennial-led Consortium intends to appoint JLL and CBRE as joint marketing agents for the sale of  AXA Tower, which the firm originally bought in 2015 for $860 million.

Other major properties in Perennial’s Singapore portfolio include TripleOne Somerset office tower, for which the firm and Asia Real Estate Income fund paid $766 million to acquire in early 2014. 

Image via Google Street View