Indonesian party in exclusive due diligence to buy Income Centre for over S$265 million

[SINGAPORE] An Indonesian party is said to be in exclusive due diligence with a view to buying Income Centre at 75 Bras Basah Road.

The price is expected to be in excess of S$265 million, or roughly S$3,617 per square foot on the net lettable area of 73,271 sq ft. The property is owned by Income Insurance.

The Indonesian party is understood to be part of the large family of Eka Tjipta Widjaja, the late Chinese-Indonesian founder of the Sinar Mas Group.

However, sources close to the party undertaking due diligence on the property said this branch of the family is not involved with the Sinar Mas business.

Sinar Mas and its linked companies, including Asia Pulp & Paper and Golden Agri Resources , have lately been in the spotlight in connection with a Singapore government probe into the haze in the region coming from fires in Indonesia.

Besides the Indonesian party, Mitsubishi Estate had also been shortlisted earlier as a potential buyer for Income Centre, following the initial closing of the bidding process in mid-July.

CapitaLand and Mitsubishi Estate have teamed up for property development projects before, including CapitaGreen and CapitaSpring, both in Singapore’s Central Business District.

Income Centre, an eight-storey freehold office building, is entirely occupied by Income Insurance. The sale is expected to include a leaseback period for the asset.

Value-add potential

Income Centre’s development potential has been fully tapped. Nevertheless, there is scope to add value to the property through asset enhancement works, and convert it to other uses, such as serviced apartments or hotels.

A strata sale is another potential option; the property falls outside the areas with a ban on strata subdivision of commercial properties.

The bidding process for Income Centre was conducted by CapitaLand Investment ( CLI ). In April, the global real estate manager secured the investment mandate to manage Income Insurance’s direct real estate portfolio, taking over from CBRE Investment Management.

CLI is said to have approached five property agencies to gather buying interest in Income Centre. Each agency submitted two bids, and CLI itself is said to have brought in two bidders.

Income Insurance was formerly known as NTUC Income Insurance Co-operative prior to a corporatisation exercise completed on Sep 1, 2022.

Earlier property sales by Income Insurance include 30 Prinsep Street for about S$147 million in 2024, and 16 Collyer Quay for about S$1 billion in late June 2022.