Spending $2.1 billion SGD on Singapore real estate! Yangtze River Shipbuilding remains committed to its original aspiration.

2023-04-04 09:00

Yangzijiang Shipbuilding Group, China's largest privately-owned shipbuilding group, has purchased a landmark office building in Singapore's central business district for nearly RMB 2.1 billion. As the most successful listed shipbuilding company in Singapore, it has finally established a presence in Singapore.

On March 29, Yangzijiang Shipbuilding announced that its 81%-owned subsidiary, Yangzijiang Realty, signed an agreement to acquire 39 Robinson Road Pte. Ltd., the owner of the office building at 39 Robinson Road, Singapore. Prior to this, real estate company 9Co Parker and investment company ICH Singapore Holdings acquired 10% and 9% equity stakes in Yangzijiang Realty respectively, aiming for a joint venture to acquire the office building owner.

Yangzijiang Realty agreed to acquire the office building for S$399 million (approximately RMB 2.065 billion). The deal was quickly finalized due to the group's ability to utilize its strong internal cash reserves to complete the acquisition without relying on external financing.

The announcement stated that Yangzijiang Shipbuilding used its internal cash reserves entirely for this transaction. This real estate will provide the group with inflation hedging and stable cash flow. As a component stock of the Straits Times Index, this investment will enhance the group's image and deepen its roots in Singapore.

Robinson Place office building located at 39 Robinson Road.

The 21-story freehold commercial building at 39 Robinson Road is located in a prime location in Singapore's financial district, with a total floor area of approximately 15,723.92 square meters. Yangzijiang Shipbuilding's joint purchase of this landmark office building aims to create a financial hub to attract institutional investors and family offices.

It is understood that the office building originally belonged to Vietnamese real estate developer Viva Capital, built in 1997, with an occupancy rate of approximately 55%. Viva Land acquired the building three years ago and began seeking buyers at the beginning of this year. The initial offer was S$470 million, significantly higher than Yangzijiang Shipbuilding's actual acquisition price.

Ren Litian, Chairman and CEO of Yangzijiang Shipbuilding Group, said: "We have been listed on the main board of the Singapore Exchange for 16 years and are a component stock of the Straits Times Index (STI). This acquisition gives us the opportunity to own our own office building, deepening the company's roots in Singapore. In addition, considering the highly inflationary environment, we believe this is a good tool to preserve our existing capital in the long term, while also providing the company with stable rental cash flow."

Ren Litian emphasized, "This is a one-off event, and our business focus remains on our core shipbuilding business. The company will appoint a professional real estate manager to manage the marketing and operations of this office building, with the aim of developing it into a financial center to attract institutional investors and family offices."

According to Singapore data agency Handshakes, the number of family offices in Singapore was negligible in 2018 but surged to 1,500 last year. In the last quarter of last year, Singapore's rents increased by nearly 40% compared to the same period two years ago. Specifically, Singapore's housing rental index has risen sharply since 2020, while the core business district office occupancy rate has continued to decline to below 5%. Surveys show that the most expensive office buildings in the world are located in London's West End, followed by Hong Kong, New York, Tokyo, and central London. Singapore has surpassed Beijing, Shanghai, Delhi, San Francisco, and Dubai, ranking sixth globally.

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