PGIM Real Estate sells Waterfront office in Shanghai to Blackrock

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PGIM Real Estate has sold Waterfront Place, an office property in Shanghai, China, to Blackrock for RMB1.2bn (€154m).

Benett Theseira, head of Asia Pacific for PGIM Real Estate, declined to comment on the sale price or identity of the buyer.

But it has been reported that the buyer is US investment manager Blackrock, and that it acquired the office complex through JLL for around RMB1.2bn.

The asset, which was held in PGIM’s Asia Property Fund (ASPF) III, was acquired by PGIM from the Singapore-based ARA fund management group in February 2016, for around RMB830m.

“We achieved an attractive entry price when we acquired Waterfront Place by capitalising on market dislocation,” said Theseira.

Of the decision to sell after owning the asset relatively briefly, Theseira told IPE Real Assets: “We were able increase occupancy and extend the WALE [weighted average lease expiry] of the asset by renewing leases with two key tenants.

”This, combined with an improved investment environment, allowed us to dispose of the asset and realise our targets ahead of schedule.”

With active asset management, along with increased demand from investors for income-yielding assets, Theseira said PGIM Real Estate had been able to maximise the value of the investment on behalf of its investor.

Waterfront Place comprises two grade-A office properties with a total area of 27,805sqm of office space and underground parking in an established mixed-use development.

The sale continues PGIM Real Estate’s track record of investing in China, Theseira said, adding: “We remain keen to increase our China exposure and are actively looking to invest.”

Last December, PGIM Real Estate sold Rock Square, a shopping mall in Guangzhou, for RMB3.36bn to CapitaLand Mall Asia and CapitaLand Retail China Trust.

PGIM purchased the shopping complex in Guangzhou’s Haizhi District for US$318mn from China Overseas Property in 2012.

Globally, PGIM Real Estate, which has professionals in the Americas, Europe and Asia Pacific, as of September 30, 2017 had gross assets under management of US$69bn.

Its parent, PGIM, the global asset management business of Prudential Financial, Inc, is one of the top 10 largest real estate investment managers in the world.