Asia Pacific Value-Add: Investing in Constrained Markets to Unlock ValueAsiaPacificValue-Add:InvestinginConstrainedMarketstoUnlockValue

Episode Transcript

>> In April 2021, PGIM Real Estate acquired a 12-story freehold office building situated in Singapore's central business district. Located on Robinson Road, it typically attracts large corporate tenants from a variety of sectors and has easy access to public transport. With Changi International Airport, a 15 minute drive away. The limited supply of office properties in the Singapore CBD combined with overseas investor interest made this, in our opinion, an attractive investment opportunity. Our value add investment strategy was to acquire property with, what we believe to be, attractive pricing. Then complete an extensive refurbishment by mid-2023 with a strong focus on environmental aspects.

>> The refurbishment focused on upgrading core communal areas and implementing smart technology, including touchless and secure access control. We installed enhanced features such as a new high performance facade with openable windows for natural ventilation, along with rooftop solar PV panels. Additionally, the building's, plant and equipment were replaced with new and improved technology focused on making the property more energy efficient.

>> We partnered with a reputable third party vendor to undertake a decarbonization study to assess the embodied carbon emissions from the existing structure and projected emissions from the planned refurbishment. The study enabled us to plan the refurbishment work such that emissions arising from the construction would be offset within three years by operational savings. This led to the installation of new energy efficient systems, such as air conditioning, lighting and solar PV panels, as well as the replacement of core elements such as the facade glazing. Thanks to these environmental design measures, the building has been awarded the Green Mark Platinum by the Building and construction Authority.

>> From our perspective, this deal presented an opportunity to acquire an older freehold office building at attractive pricing and implement major improvements focused on decarbonization creating an attractive, modern, and efficient office building for future investors. Our viewpoint is that Singapore remains one of the most interesting office markets in the region, appealing to a diverse range of tenants, many of whom are headquartered in Singapore. Despite a more challenging market environment, the Singapore office market has shown great resilience and continues to be attractive for investors. We believe the opportunity to acquire a freehold property in this locality is rare and should contribute to the aim of unlocking the highest optimal sale value.

>> The strategic location of the building coupled with a significant upgrades and our commitment to incorporate sustainable initiatives into the project have created what we think is an appealing product for future investors.