CapitaLand strikes biggest deal in Asia-Pacific

In the largest office transaction in the Asia-Pacific this year, Singaporean real estate company CapitaLand purchased a landmark office tower for SGD2.09 billion ($1.55 billion).

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CapitaLand Commercial Trust has agreed to buy Asia Square Tower 2, part of a world-class commercial development in Singapore’s Marina Bay business and financial district. Real estate consultancy firm JLL provided advisory for the transaction on behalf of the seller, BlackRock Asia Property Fund III.

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

Asia SQuare Tower 2 is the largest office transaction so far in Asia Pacific this year

“The sale of Asia Square Tower 2 continues the trend of buyers being attracted to mega deals in Asia. The sales process generated strong interest from major global investors and sends a clear message about the continued recovery of the Singaporean office market,” said Stuart Crow, head of Asia Pacific Capital Markets, JLL.

“With its sought-after location and first class amenities, Asia Square is one of the finest commercial real estate assets in Singapore and, more broadly, in Asia. Buildings of this quality and prominence are hard to come by, but we expect to see increased interest in Grade A office assets in Singapore off the back of this deal,” said Crow.

According to Greg Hyland, head of Capital Markets, Singapore, JLL, the Singaporean office market is really starting to gain traction and this deal will likely spur further interest, both domestically and internationally.

"Investors will become aware that we are at a point in the cycle where there are still opportunities 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,” he added.

The 46-storey Tower 2 has a net lettable area of 778,719 square feet (72,345 square metres). Asia Square Tower 1 was sold in June 2016 to sovereign wealth fund Qatar Investment Authority for SGD3.4 billion ($2.45 billion).

The entire Asia Square asset comprising of Tower 1, Tower 2, and Westin Singapore, achieved a combined sale price of SGD5.8 billion ($4.3 billion). The three elements were sold in 2016, 2017, and 2014, respectively.

JLL has been the leasing agent and property manager of Asia Square since it opened in 2011. Tenants of Tower 2 include major financial institutions such as Allianz, Mizuho, Mitsui, National Australia Bank, and Westpac.

By Bich Ngoc