Economy

BlackRock to Sell Singapore Office Tower for US$1.6 Billion

BlackRock to Sell Singapore Office Tower for US$1.6 Billion”

CapitaLand Commercial Trust on Thursday said it would buy Asia Square Tower 2 in Singapore's Marina Bay from BlackRock for about S$2.1 billion. Qatar Investment Authority, the gulf state's wealth fund, a year ago bought the adjacent Tower 1 from BlackRock for S$3.4 billion in what was Singapore's biggest office transaction.

CapitaLand Commercial Trust said it will fund the acquisition with a rights issue and bank loans.

The deal for Asia Square Tower 2 marks Singapore's second-largest office building sale after that of 43-storey Tower 1, which BlackRock sold a year ago to the Qatar Investment Authority for $2.5 billion.

A deal for the 28-storey PwC Building in Singapore's financial district and a stake sale in TripleOne Somerset near the Orchard Road shopping belt mark some of the other recent commercial transactions.

The property will be acquired from a BlackRock Asia Property Fund III, and is expected to generate a net property income (NPI) yield of 3.6% based on a committed occupancy rate of 88.7% as at 30 June 2017, said the REIT. DBS Bank Ltd., J.P. Morgan Chase & Co. and HSBC are advising CapitaLand Commercial Trust on the rights issue.

American asset manager BlackRock Inc.

"With this acquisition, CCT is now well anchored in all the key sub-markets in Singapore's Central Business District: Marina Bay, Raffles Place, Tanjong Pagar and City Hall; cementing its position as the largest landlord of prime office assets in Singapore".

"(The deal) provides another pricing benchmark which reconfirms that the recovery in office rents and prices is well underway", said Jeremy Lake, executive director, capital markets at the CBRE real estate services firm.

BlackRock's real estate business in Singapore - formerly MGPA before a takoever in 2013 - developed the Asia Square complex after paying a record price for the reclaimed land in 2007.

"One or two owners have been tracking this deal pending making a decision to sell their own building".



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