AM alpha’s timing-driven, value-add real estate play
AM alpha’s $269.7 million purchase of 112 Robinson in Singapore’s CBD in December 2021 was a coup for the Munich-based family office. It was the group’s maiden real estate acquisition in Singapore since 2009, when it established its Asia Pacific headquarters in the city-state.
AM alpha has a global allocation and a real estate focus. “It was important to have our footprint in Asia,” says Martin Lemke, managing director of AM alpha, who was in Singapore recently. “Since the Asian markets were hot in 2006-2007, we decided to wait a bit. And when the market cooled off, we started to acquire assets.”
From 2010 to 2012, AM alpha acquired prime mixed-use and commercial office buildings in key cities in Asia Pacific, namely Shanghai, Sydney and Tokyo. “We bought assets in Japan, even after Fukushima [nuclear accident in March 2011],” says Lemke.
In Singapore, AM alpha explored the residential sector but focused on commercial property instead. “We are open to further investments in office space, mixed-use developments and logistics, if it makes sense,” says Lemke. “We are pretty much agnostic.”
At 112 Robinson, AM alpha’s purchase price translates to $2,925 psf, based on the net lettable area of 92,205 sq ft. The property sits on a freehold site of 9,794 sq ft.
The seller of 112 Robinson was Robinson Singapore Holding, whose ultimate holding company is Lion Trust. Cushman & Wakefield brokered the “off-market deal”.
The existing 14-storey office building has offices on the upper levels, and shops and F&B on the ground level. A previous owner had refurbished it in 2003.
$12 million revamp of 112 Robinson
Instead of tearing down and redeveloping, AM alpha intends to revamp 112 Robinson. “We believe that retrofitting existing buildings like what we are doing at 112 Robinson is going to be the future,” says Lemke. “Decarbonisation of real estate is going to be the focus for the next 10 to 15 years. You cannot talk about decarbonisation and at the same time blow up existing buildings and release tonnes of carbon, and then build a new one and release even more carbon.”
AM alpha intends to spend $12 million to enhance the property, including the entrance façade, reception area, restrooms, lifts and lift lobbies, and add end-of-trip facilities to the rear of the building. “We’re going to clear all the old-style fittings and introduce a modern building,” says Lemke.
The building will retain its BCA Green Mark Platinum rating. “My strong belief is that if you don’t focus on ESG, you might do well in the short term, but you might face a bit of pressure in the longer term,” says Lemke. “And that’s also why we’re going to maintain our Green Mark Platinum rating at 112 Robinson.”
Some retail space on the ground floor will make way for the creation of a more welcoming entrance and reception area. “The whole arrival experience will be different,” he adds. There will also be a new café, “nice enough for people to want to go there instead of just grabbing coffee on the way up to the office”, he notes.
Renovation works began at 112 Robinson in 4Q2022, and AM alpha intends to complete them by 3Q2023.
112 Robinson is 85% leased, and existing tenants include those in financial and professional services, and consultancies. AM alpha wants to free up some full floor plates for co-working space. “I believe co-working is still relevant for office buildings today, especially for occupiers with executives and clients visiting from out-oftown,” says Lemke.
On the hunt for ‘one or two more’
AM alpha is looking for “one or two more” office or commercial mixed-use properties to acquire for its Singapore portfolio. “There’s a lack of office space in Singapore,” says Lemke. “There is