Mukesh Valabhji

Mukesh Valabhji Information

Month: May 2015

50% Stake in Robinson Land, Singapore, Acquired by Offshore Fund

A share purchase agreement completed in 2011 saw a 50% stake in Robinson Land sold to an offshore fund controlled by a select group of high net worth investors. Robinson Land had as its sole asset the 12-storey Finexis Building on Robinson Road in Singapore. The size of the transaction was calculated based on the latest valuation of the property, which stood at $110 million at the time of the sale. This equates to $2,043 per square foot of office strata across a total strata area of 53,830 square feet, thought to be close to the net lettable area of the building.

Buxani-CMG

The half stake in Robinson Land was sold by the Buxani-CMG partnership, which has successfully acquired several prime properties in Singapore since 2006. The partnership comprises a group of offshore investors advised by fourth-generation Seychellois Mukesh Valabhji of Capital Management Group, and former Goldman Sachs banker and real estate investor Kishore Buxani.

The largest acquisition deal made by the partnership in Singapore to date was the purchase of 26% of the Samsung Hub building on Church Street in 2007 – six entire floors of the Grade-A strata titled 999-year leasehold office development. Many of these office units have since been sold on by Buxani-CMG at a profit. Kishore Buxani has been investing in the commercial real estate market in Singapore since leaving Goldman Sachs in 2005. Mukesh has a number of business interests across the world including the Seychelles cable television company Intelvision and numerous resort and commercial property investments.

mukesh valabhji

Finexis Building

The Finexis Building is located at 108 Robinson Road in Singapore. Robinson Road is a major trunk road located deep within the central business district of Singapore and flanked by skyscrapers on both sides. The Finexis Building was initially purchased by the Kishore Buxani/Mukesh Valabhji partnership in 2006 for $48 million, and since that time a further $6 million has been spent on modernisation and refurbishment. Over 82% of the floor space in the building was let at the time of the latest deal, with five floors occupied by anchor tenant Finexis Advisory. Other tenants include the Australian companies Box Hill Institute and Cliftons, and Melior International College, which has links with CQ University in Australia.

The land area of the Finexis Building is 5,549 square feet, with a gross floor area of 64,766 square feet – 11.67 times the land area. This exceeds the maximum plot ration for the site, which is currently set at 11.2 times the land area. The freehold tower did not at the time of the deal have any immediate potential for redevelopment. Rental prices for office space within the Finexis Building for existing contracted tenants remains at approximately $5.60 per square foot per month, while new tenants in the latest rental transactions are being charged $7. The net yield, assuming a valuation of $110 million and a rental rate of $7 per square foot per month, works out at 2.9%.

Commercial Real Estate Investment in Singapore

Singapore is currently drawing in investors from across the world. Recent cooling measures put into place by the government have caused many prominent investors to switch their real estate portfolio from residential to commercial properties, offering high yield and capital gain. Incentives include no capital gains tax, a good exit strategy, no seller stamp duty or additional buyer stamp duty, and loans of up to 80%.

In 2011 Singapore was rated as the top investment market for real estate in the Asia-Pacific region, in a forecast published jointly by PwC and the Urban Land Institute. More recent forecasts predict that rents on premium office space in Singapore are likely to rise by as much as 15% over the course of 2015. The country scores consistently high in the rankings of easiest places to do business and has been attracting start-ups and expansions for some years, with businesses choosing Singapore as a strategic hub for global expansion. Low levels of corruption, stable government and financial incentives combine to make Singapore an attractive opportunity for real estate investors – particularly those looking at commercial properties. Start-ups in Singapore are also protected by intellectual property laws upholding the very highest standards.

Investors such as Mukesh Valabhji and Kishore Buxani focus on the acquisition of prime commercial properties within Singapore, creating value through tenant remixing, asset refurbishment and repositioning. The partnership retains a 50% stake in Robinson Land Pte Ltd, and by extension the Finexis Building.

Half Stake in Finexis Building Sold at $2,300 psf on Strata Area

In January 2014 a 50% stake in the Finexis Building, Singapore, was sold to an offshore fund managed by Sin Capital Partners for $2,300 per square foot on strata area. The deal on half of the 12-storey building, located at 108 Robinson Road, was based on the value of the building at $123.8 million. This latest deal follows the previous sale of the other half stake in the building in 2011 to another offshore fund managed by Sin Capital Partners, at which point the building was valued at $110 million.

Prior to the two 50% sales the entire building was owned by a partnership between Kishore Buxani and investors advised by Mukesh Valabhji of Capital Management Group. Both deals took place through sales of shares in Robinson Land Pte Ltd, the company that owns the Finexis Building as its sole asset.

mukesh valabhji

Buxani-CMG

The partnership that owned the whole of the Finexis Building from 2006 to 2011 is comprised of Kishore Buxani, an ex-banker who worked with Goldman Sachs for almost a decade before leaving to explore commercial real estate investment in Singapore, and a group of investors advised by Capital Management Group under Seychellois Mukesh. The Buxani-CMG partnership has invested in several commercial properties in the central Singapore business district in recent years, including six floors of the Samsung Hub building, a 999-year freehold building on Church Street close to Raffles Place, and strata office units located in the Parkway Centre in Marine Parade Central. At the time of the current Finexis deal, Buxani-CMG had also sold three of the six Samsung Hub floors.

Valabhji has numerous business interests across the world, from investing in commercial and resort properties to owning a cable television network. Mukesh Valabhji videos can be found online, detailing some of these current interests. Buxani focuses almost exclusively on the Singapore commercial real estate market. Buxani-CMG’s recent business activity includes the purchase of the four-storey commercial property Katong Junction, a freehold property with acquired planning permission for additions and alterations works that will be divided into 57 commercial units. These will include food and beverage units on level one, retail outlets on levels one, two and three, and commercial office space on level four. The property also includes 29 basement car park lots.

Sin Capital Partners

The real estate and investment firm Sin Capital Partners was established by David Sin with a view to sourcing investment opportunities in companies and assets throughout Singapore and wider Asia. David Sin comes from a strong financial background, having previously worked with both Goldman Sachs and AIG in Hong Kong and London. It is thought that the two offshore funds currently controlling the Finexis Building are comprised of a select few high net worth investors.

Finexis Building, Robinson Road

The Finexis Building is situated at 108 Robinson Road, in the heart of the Singapore central business district. A major trunk road, Robinson Road was converted into a one-way street and widened during urban reconstruction and development to accommodate huge traffic flow. Today the road is flanked on either side by skyscrapers and lends its name to several buildings in the vicinity, including Robinson Point and Robinson Centre. Valued at $123.8 million at the time of the latest deal, the Finexis Building is around 96% let, reflecting a net rental yield of just over 2%. The lease of five floors of the building by anchor tenants Finexis Advisory, comprising almost 24,000 square feet, is thought to have been recently renewed. Other existing tenants include two Australian firms, Box Hill Institute and Cliftons.

Singapore Central Business District

Strategically located and with links to nearly all major Asian markets, Singapore is a favourite choice with today’s investors, businesses and entrepreneurs looking to enter or expand into the Asia-Pacific region in order to establish a global business presence. The Finexis Building offers premium Grade-A office space only minutes away from the Tanjong Pangar MRT Station and Raffles Place.

Originally known as Commercial Square, Raffles Place was renamed in 1858 in honour of Sir Stamford Raffles, founder of modern Singapore. In the 1820s Raffles decided that Singapore had the potential to become a great commercial emporium, and Commercial Square was at the heart of his plans to make this happen. Since this time the central business district of Singapore has undergone almost constant commercial development and today it is home to numerous skyscrapers, banks, financial organisations and other businesses.

Samsung Hub: Commercial Property Retrospective

Singapore offers much to the commercial sector, no more so than its stunning array of commercial properties to let. One of the city’s most impressive locations is the Samsung Hub building, which boasts some of the most sought after office spaces in the city, situated as it is surrounded by the internationally renowned financial infrastructure of Singapore.

Commercial property has continued to soar in value, despite the 2008 recession, and has proven time and time again to be a target for savvy investors. Over the past few years, the Samsung Hub has been a pivotal location for this booming sector, and as such has produced opportunity for both those looking to rent offices for their businesses, and those wishing to invest in commercial property.

mukesh valabhji

Samsung Hub: Meeting the Location Criteria

There are various financial centres around the world which draw the best business minds towards them. London, New York, Hong Kong etc. all are cities which have huge resources in terms of talent, population and infrastructure, which can be harnessed by both large and small businesses on a global scale. Just a look at Mukesh Valabhji’s business profile, a key investor in commercial property in that area, shows the sheer wealth of connections which can be made in such an environment. Singapore is phenomenal, and indeed rivals most of the great financial epicentres associated with commerce and growth, and is one of the reasons the Samsung Hub building has been such a success.

With this location, businesses can use the Samsung Hub as a starting point in which to immerse themselves in the bountiful and prosperous market economy, which Singapore has made so famous. Singapore has a AAA finance rating, and easily the most impressive GDP to trade ratio globally – all of this leaves the Samsung Hub perfectly situated as a property which can provide access to one of the greatest trading economies in the world, benefiting businesses which choose to base their operations there.

Past Impressive Property Deals

Samsung Hub has presented prosperous opportunities for both property investors and businesses looking to establish themselves in Singapore. With 30 storeys and 299,753 square feet of space, it’s easy to see why so many businesses have made the decision to move their organisations to this location. Indeed, a long list of mutually successful property agreements have been undertaken since the building’s completion in 2005.

These have included:

  • Floor 16: A huge gain for Capital Management was in their sales of office spaces on the 16th floor in December, 2012. At that time, the price agreed was $3,000 per square foot. At 13,132 square feet in total, the profits amassed through the sale of the 16th floor were hugely impressive.
  • Floor 17: In 2013, the entire 17th floor attracted prices of a staggering $3,500 per square foot. Overseen yet again by Capital Management Group (a Seychelles based investment initiative), this is a huge investment brokered by these businesses pertaining to numerous strata within the Samsung Hub building. This set a new record in Singapore for Office space by Capital Management, owned by Mukesh Valabhji, Seychelles based.
  • Floor 18: In 2014, the 18th floor was sold for another massive margin of $3,225 per square foot, resulting in around $42.35million Singaporean Dollars. This was also overseen Capital Management Group, owned by Mukesh Valabhji once again cementing their respective organisations as key players in international commercial property acquisition and sale. A large amount of subsequent commercial property deals have been agreed for strata within Samsung Hub; indeed, there are too many to mention within the scope of this article. Needless to say, each sale has been a lucratively profitable venture for all involved.

Samsung Hub: Future Perfect

Singapore’s economy continues to grow, as too does its population and available resources. As this growth progresses unimpeded, the demand for existing and new commercial properties will increase in tandem. Samsung Hub has already proven to be an exceptionally profitable revenue stream for businesses and individuals who have invested in it, and this is certain to continue. Singapore itself is robust economically, and as such could provide an evergreen investment for property developers. Furthermore, because it is most likely to experience growth for many years to come as a financial centre, businesses which establish themselves there are sure to benefit from this eventuality. Indeed, this is entirely the reason behind commercial property being so widely sought after in the region.

The Samsung Hub has allowed many businesses to excel within a competitive environment, providing access to amenities and business infrastructure as effective and important as anywhere else in the world. It will continue to do so, offering opportunities for inverters in commercial property and entrepreneurial organisations alike.

Samsung Hub Reaps Huge Rewards for Investors

With the sale of the 18th floor of the Samsung Hub in Singapore, the commercial property sector continues to go from strength to strength, and the success of this growth is represented in the premium price commanded by the spaces within this impressive building. The Buxani Group, assisted in their investments by Capital Management Group, which can be read about in greater detail via Mukesh Valabhji’s Twitter account, has been a key player in the profits generated by the Samsung Hub – a brilliant example of the lucrative commercial property opportunities opening up in the area. Singapore itself is of course a singularly important city of commerce on the domestic and international business scene, and so this has been a critical factor in making commercial property such a desirable investment opportunity in that region.

Samsung Hub: Exceptional Office Space

Built on the old Church Street, the Samsung Hub is an exceptional skyscraper sitting in the heart of the Singapore business district. With over 30 storeys and being 564 ft in height including antenna, the building provides all of the needed amenities and space for a modern 21st century business to establish itself quickly.

The building was opened in 2005 with a striking post-modern aesthetic, which conveys the streamlined, efficient and impressive nature of the businesses contained within. Indeed, using a luminous curtain wall approach with beautiful turquoise glass allows the Samsung Hub to stand out from the other buildings in the business sector, which are most commonly comprised of granite. It is in this individuality that the building exerts its influence over those who pass by, marveling at its size and professional appeal.

The design and appearance of the Samsung Hub is one of the reasons why it has become such an important building for those either investing in or renting out commercial office space in Singapore. Its location is also a huge boon to any company residing there, allowing them to take advantage of the business infrastructure already in place, while carrying with it a level of status. This is afforded to businesses there, because having a prime location is often indicative of a strong, sustainable and ever-growing enterprise which is competing well at the top of its respective industry.

For all of these points, the Samsung Hub is situated perfectly to meet the needs of large, successful organisations, while showcasing the relevance and grandeur of Singapore as an important centre of commerce.

mukesh valabhji

Snapping Up Premium Office Space

Selling the entire 18th floor is no surprise, as the spaces available in the Samsung Hub are extremely desirable and tend to be snapped up as quickly as possible by Singaporean and international businesses alike. Selling at $3,225 per square foot, the 18th floor is just the latest storey of the building to be sold out, with demands high, not just because of its amenities and location, but also because of its exceptional lease availability. Each leaseholder has the option to take out a tenure of 999 years, meaning that no business need worry about having to change location in the future. This creates confidence in being able to forge a strong local presence, as well as a global one, using offices within the Samsung Hub as a platform for further expansion in any chosen marketplace or industry.

Previously, the highest payment made to any owner of an office space in the Samsung Hub was $3,030 per square foot. This deal was completed in return for use of the building’s 14th floor when sold in early 2014 by Arch Capital Management. Indeed, this increase in price is indicative of the growing interest in office space within Singapore and within investment and finance communities. Whether these prices have now stabilized, or if they will continue to increase, only time will tell. Certainly, any office space in the Samsung Hub will require a serious amount of capital whether now or in the years to come, such is its status and prestige.

Incredible Returns on Samsung Hub Investments

One of the key components to any investment is knowing when and where to buy. This is no truer than with commercial or office space. The Samsung Hub is a perfect example of this; due to its location, design and associated status, it has proved to be an incredible lucrative investment opportunity for those involved in the real estate industry.

The aforementioned deal for the 18th floor netted the Buxani Group a staggering $42.35 million, which by any count is an incredible sum of money. Knowing full well the importance and healthy condition of the Singaporean commercial real estate sector, the company is now looking to reinvest much of this money in similar sites across the city to further extend these remarkable profits.

Future Proof

Investment in office space continues to net various companies and individuals a substantial return, and there is little sign of this trend abating. Through insight provided by key advisors, the Buxani Group and others have attained huge returns on their investments, which has only added to the status surrounding office space as a wise and fruitful are in which to invest.