Mainland Developer Yanlord Marketing Half-Stake in Anson Road Project for $240M

79 Anson Road was approved for redevelopment in 2022

After swinging to a loss of RMB 486 million ($66.5 million) in the first half of 2024, SGX-listed mainland developer Yanlord Land is marketing a half-stake in a commercial project in Singapore’s Tanjong Pagar area for S$325 million ($240.1 million).

United Engineers Ltd, a unit of the Shanghai-based builder, is making available the 50 percent holding in UE Bizhub Tower, a 289,185 square foot (26,866 square metre) block at 79 Anson Road, at a 4.5 percent markdown to the price PAG paid for a neighbouring tower less than one year ago, with JLL and CBRE having been appointed to represent the seller, according to a statement.

UE Bizhub Tower is approved for redevelopment under a government programme which allows for additional floor area in central business district commercial projects which incorporate residential space into their designs, according to CBRE, paving the way for a 25 percent-larger project which would span 361,465 square feet.

“In today’s market, investors are seeking higher returns with more dry powder allocated towards opportunistic strategies. This shift reflects a clear movement up the risk curve amidst the heightened interest rate environment,” Ting Lim, head of capital markets for JLL Singapore said. “This redevelopment opportunity we are presenting in Singapore’s CBD is particularly compelling for investors looking to capitalise on development opportunities in a land-scarce investment market like Singapore.”

Adding Floors
With frontages along Anson Road, Palmer Road, and Mistri Road the 33-year-old office tower is being offered with a 99-year leasehold tenure available starting from the completion of the sale and purchase, according to its marketing agents.

United Engineers chairman Zhong Sheng Jian (Image: Yanlord Land)

Commenting on prospects for the marketing exercise, Galven Tan, CEO of Knight Frank Singapore told Mingtiandi that the site attributes for 79 Anson Road “are strong and the supply of Grade A office space in the CBD remains tight.” “There is also no known office supply in the CBD on the confirmed and reserve list of government land sale,” he added.

Office rents in Singapore’s key commercial hubs stayed steady in the fourth quarter of 2024, compared to the same period a year earlier, with leasing rates in the Raffles Place/Marina Bay area climbing 2.1 percent for the full year, compared to 2023., according to a report by Knight Frank.

The redevelopment of 79 Anson, which was approved in 2022, has been approved for expansion of the 23-storey tower to 28 floors, including 10 storeys of office and 255 serviced apartments across 12 floors.

Based on the current structure, the asking price for the stake in 79 Anson values the project at S$2247.7 per square foot of built area. In May of last year PAG acquired 60 Anson Road, then known as Mapletree Anson, from Mapletree Pan Asia Commercial Trust for S$775 million, a deal which valued that building a few steps from 79 Anson at S$2,352 per square foot – 4.5 percent more than the seller’s target in the current exercise.

The current asking price for the stake in 79 Anson is equivalent to S$1,800 per square foot of the expanded project area following redevelopment.

Anson Road Revival
The 79 Anson Road  stake sale offers prospective investors entry to the overhaul of an aging section of Singapore’s central business district as the redevelopment project is among 14 granted provisional permission under the government’s CBD Incentive Scheme, CBRE said.

Launched in 2019 to rejuvenate office-centric districts, the scheme allows bonus floor area of up to 25 percent for developers which add hotel or residential space when redeveloping a commercial property in the central business district.

Other redevelopments under the CBD incentive scheme include City Developments Ltd.’s Newport Residences, a 246-unit luxury development within the Newport Plaza complex on Anson Road launched in 2024, and Perennial Holdings’s The Skywaters, a 305-metre tall project being developed on the AXA Tower site on Robinson Road which will become Singapore’s tallest building upon its planned completion in 2028.

Yanlord, chaired by Chinese billionaire Zhong Sheng Jian, took ownership of 79 Anson through its 2019 acquisition of United Engineers in a S$1.7 billion deal, with the company delisting the Singapore-based firm from the bourse the following year.

Last Friday Singapore’s Urban Redevelopment Authority announced that it was extending the CBD Incentive Scheme, along with another incentive programme which grants additional floor area for developers merging two or more commercial properties, through February 2030.