Transactions - SEPTEMBER 21, 2017

BlackRock sells Singapore office tower for $1.5b

by Andrea Waitrovich

BlackRock Asia Property Fund III, managed by BlackRock, has agreed to sell Asia Square Tower 2, a prime office tower in Singapore’s Marina Bay financial precinct, to CapitaLand Commercial Trust for $1.5 billion.

Asia Square Tower 2 totals more than 778,719 square feet with office space and a Westin Singapore Hotel, which is not included in the sale. Office tenants include National Australia Bank and Vodafone.

The sale represents the largest office transaction in both Singapore and the Asia Pacific region in 2017 and is the second-largest office transaction globally this year.

In May, CapitaLand Commercial Trust sold a 50 percent interest in One George Street in Singapore’s central business district for $870 million to a limited liability partnership. The joint venture partner is FWD Group.

Other blockbuster commercial property deals in Singapore include Qatar Investment Authority paying $2.52 billion for Asia Square Tower 1 in 2016. And a unit of Malaysia’s IOI Properties Bhd paid $1.92 billion for a 2.7-acre plot in the Marina Bay district.

According to Greg Hyland, head of capital markets, Singapore, JLL, “The Singapore office market is really starting to gain pace and this deal is likely to spur further interest, both domestically and internationally. Investors will be aware that we are at a point in the cycle where there is still the opportunity to get good value, but we expect prices to pick up in the coming quarters as supply starts to taper down between now and the end of 2019.”

Cushman & Wakefield said in a June report that, overall, class A central business district rents rose 1.7 percent in the second quarter, the first increase in nine quarters. It forecast a full-year rental increase of up to 5 percent for the overall class A market in the central business district.

Colliers International reported office sales transactions during the second quarter 2017 increased 10.9 percent quarter-over-quarter to 61 from a total transaction volume of 55 during the first quarter 2017. However, it was 28.2 percent below second quarter 2016’s 85 transactions.

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