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Sep 20, 2007

Lehman, Japan firm invest $450m in new office block

Kajima-Lehman venture plans to have Robinson Rd project up by 2009

By Joyce Teo, Property Correspondent

CONSTRUCTION of a new $450 million office building on Robinson Road will be fast-tracked to cater to rising demand for office space amid a serious shortage in Singapore.

The 15-storey block should be up by mid-2009, about a year ahead of a large influx of office space expected in 2010.

Japanese construction company Kajima Overseas Asia and global investment bank Lehman Brothers said yesterday they will jointly invest $450 million in the project.

It will be built on the former Crosby House site and will target financial institutions, which are expanding in Singapore, fuelling demand for quality space. To be named 71 Robinson Road, it will offer 280,000 sq ft of Grade A office space.

The vacancy rate for prime Grade A space is now 1.65 per cent. Most of the vacancies are in the 1,000 sq ft to 3,000 sq ft bracket, said Jones Lang LaSalle's regional director and head of markets, Mr Chris Archibold.

'There will be continued competition for space in the next two to three years.'

71 Robinson Road is the first direct investment for Lehman Brothers' Global Real Estate Group, which has US$7.3 billion (S$11.1 billion) invested in Asia. Its exposure in Asia will be kept at current levels over the next three years, said senior vice-president Blake Olafson.

He said Lehman is now moving the real estate group's regional operating headquarters in South-east Asia from Bangkok to Singapore. Mr Olafson, who moved here from Bangkok two days ago, said he aims to double staff strength to 12.

Apart from the office building, Kajima has two other development projects in Singapore: a joint-venture condominium project on Balmoral Road and a residential one in Bishopswalk.

Lehman and Kajima bought the Robinson Road site last October from SingTel for $163.4 million, or about 60 per cent above the indicative price.

The site used to house an ageing seven-storey block, which had the Robinson Road post office as its anchor tenant. The sparkling new building that will take its place will have a totally different look.

Apart from high-quality specifications, it will boast an environmentally and ecologically friendly design by renowned German architect Christoph Ingenhoven.

joyceteo@sph.com.sg