SINGAPORE—BlackRock Asia Property Fund III is exiting its ownership of the Asia Square office complex here with the sale of Asia Square Tower 2. The buyer was locally based CapitaLand Commercial Trust, which is paying S$2.15 billion, or approximately US$1.59 billion, for the 778,719-square-foot tower.
The deal represents Asia's largest commercial real estate transaction year to date. BlackRock's 2016 sale of the larger Asia Square Tower 1 in Singapore to the Qatar Investment Authority, valued at approximately S$3.4 billion (US$2.45 billion), was the region's largest-ever single-tower deal.
“We seized the opportunity to acquire a premium grade A property at an attractive price and entry yield,” says Lynette Leong, the REIT's CEO. “Market statistics have shown that Singapore's office market rents have reached a trough; hence, the acquisition will position CCT to benefit from the expected market uptick in grade A office rents. Given our track record of successful leasing strategies, we will be able to capture further rental income upside from increasing the property's 88.7% occupancy in a rising market.”
When the deal closes, Leong adds, the addition of Tower 2 will “substantially enhance the quality, resilience and diversity of CCT's portfolio. Post-acquisition, CCT's portfolio value will increase from S$8.0 billion to S$10.1 billion. The contribution from grade A buildings will significantly increase from S$4.9 billion to S$7.0 billion and augment the quality of our portfolio for long term growth.”
The 46-story property, which was completed in 2013, is among the newest properties in Singapore's Marina Bay area. Along with a roster of 36 office tenants and 24 retailers, it also incorporates the Westin Singapore hotel. CCT said Thursday it expects the sale to be finalized in November.
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Paul Bubny
Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.
