Mukesh Valabhji

Mukesh Valabhji Information

Tag: Commercial Offices

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.