Oxley cashes in on S’pore’s hot office market

The office market is running hot — so much so that debt-laden Oxley Holdings Ltd just sold a building for S$365 million (RM1.1 billion) more than it paid less than 18 months ago.

Oxley agreed to sell Chevron House, a 32-storey tower in the central business district, to Golden Compass (BVI) Ltd for S$1.03 billion in cash and assumed debt, according to a statement late on Monday.

Oxley bought the property, which comprises 27 levels of office space and a five-storey retail podium, for S$660 million in December 2017. Golden Compass is controlled by AEW, a United States-based real estate fund manager.

The deal is the latest sign of strength in the city-state’s commercial property market.

Office rents climbed to a 10year high in the first quarter amid constrained new supply and solid leasing demand, according to Jones Lang LaSalle Inc. Rents should rise 10 per cent this year, following a jump of 12.4 per cent last year, according to Bloomberg Intelligence.

Landlords remained fairly optimistic on the outlook for rents and this would be supported by tapering new office supply in the medium term, said Desmond Sim, head of research for Singapore at CBRE.

Oxley has been selling assets to reduce leverage. The firm had total debt of S$3.9 billion and cash and cash equivalents of S$248.5 million as of December 31, data compiled by Bloomberg show.

The developer’s shares jumped 6.7 per cent in trading, here, extending this year’s gain to 10.3 per cent. Still, that’s recouped only a fraction of last year’s 47 per cent plunge as investors grew concerned the company had taken on too much debt.