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 SGD2.09bn (€1.3bn).
BlackRock set a record last year when it sold Asia Square Tower 1 to the Qatar Investment Authority for SGD3.4bn.
CapitaLand Commercial Trust (CCT), one of Asia’s largest reale estate investment trusts will fund the transaction with equity and debt.
It will look to raise SGD700m and sell assets to raise a further SGD340m, in addition to external bank borrowings of SGD1.12bn.
Soo Kok Leng, chairman of the CCT Management, said: “The addition of Asia Square Tower 2 is a strategic move is in line with our portfolio reconstitution strategy to rejuvenate CCT’s portfolio, with the addition of newer and higher yielding grade-A assets.”
The transaction will increase the value of CCT’s portfolio from SGD8bn to SGD10.1bn.
Soo said in a statement that CCT is now “well anchored” in all the key sub-markets of Singapore’s central business districts.
Lynette Leong, CEO of the CCT Management said market statistics show that Singapore office market rents have reached a trough.
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.
The Asia Square Tower 2 sits in the BlackRock Asia Property Fund III. The purchase is due to be finalised in November.
This is BlackRock’s fourth property sale in Singapore since 2015 as it winds down the former MGPA closed-ended funds.