SEB Sells Singapore Office Asset for $228M; Pays $54M for Tokyo Office Building

By Eliza Theiss, Associate Editor

SEB Asset Management, the real estate arm of SEB Group, has kicked off 2014 strongly with several notable transactions, especially in the Asia-Pacific commercial real estate market.

In its most recent deal, SEB Asset Management purchased the 38,427-square-foot Primegate mixed-use office building in Tokyo. Paying $54.2 million (JPY 5.5 billion) for the 10-story building, SEB picked up the asset for SEB Asian Property Fund II SICAV-SIF, an investment fund specialized in Asian real estate under Luxembourg law, country to which a fund management laws adheres.  The building’s main draw comes from its location – just one minute’s walk from the Takadanobaba train station in Shinjuku, one of Tokyo’s five central districts. Takadanobaba is one of the busiest stations of the Japanese capital, being served by three lines for a total daily passenger volume of 210,000.

“In addition to its excellent location and above-average building quality, this property’s main compelling feature is its broadly diversified tenant structure,” said Choy-Soon Chua, managing director, SEB Investment GmbH, SEB Asset Management Asia.

Primegate has 13 tenants and a close to full occupancy rate; 21,689 square feet are taken up by retail and restaurant space, while the remaining 16,738 square feet is office space.

The purchase comes after Choy-Soon Chua disclosed that the company’s main focus has become Japan, due to the market’s superior upturn in the APAC region.

“Given the strong macroeconomic data, long-term investors now have an excellent opportunity to generate reliable risk-adjusted income in the region,” said Chua after SEB completed the sale of its stake in the 37-storey Springleaf Tower in Singapore’s CBD.

SEB’s interest was comprised by 12 strata title stories featuring more than 106,000 square feet of Class A office space, which brought in $228 million (SGD 289 million) of sale proceeds. SEB sold the asset off floor by floor to multiple undisclosed Chinese companies. SEB earned a significant profit from the sale, as it paid 30 percent less or about $177 million (SGD 225 million) for the stake in 2007 upon purchasing it from Macquarie Global Property Advisors for its SEB Asian Property Fund. The sale wrapped up a longer disposition period of the asset – at the beginning of 2013, SEB had divested 54 percent or more than 111,000 square feet of its interest in Springleaf’s office component.

Located in the CBD of the Shenton Way submarket, the 2002-built, 541-foot skyscraper is a mixed-use office tower with a tenure of 99 years starting in 1996. It also features a residential component described as service apartments on the tower’s website. Springleaf is located a few minutes’ walk from several mass transit options, such as the Tanjon Pagar Mass Transit station and offers quick access to the area’s shopping, entertainment, education,  art and worship options.