BlackRock : to Sell Singapore Office Tower for $1.59 Billion — Update
By P.R. Venkat
SINGAPORE–U.S. asset manager BlackRock Inc. plans to sell an office building in the heart of Singapore’s business district to a local real-estate investment trust for 2.15 billion Singapore dollars (US$1.59 billion).
CapitaLand Commercial Trust will buy Asia Square Tower 2 from BlackRock Asia Property Fund III LP, the Singapore-listed firm said in a filing to the central bank.
The sale would be one of Singapore’s biggest real-estate deals so far this year and would be BlackRock’s fourth property sale in the city-state since 2015. Last year, it sold its Asia Square Tower 1 in the Marina Bay district to Qatar sovereign-wealth fund Qatar Investment Authority for S$3.4 billion.
CapitaLand Commercial Trust said it would fund the acquisition with a rights issue and bank loans. The company is planning to sell 513.54 million rights units at S$1.363 each that will raise S$690.4 million (US$511.9 million), and will seek S$1.12 billion in bank borrowings.
The remainder would be funded by divestment proceeds from CapitaLand Commercial Trust’s sale of its car park.
BlackRock, one of the world’s largest asset managers with US$5.4 trillion in assets under management, had taken ownership of Asia Square in 2013 when it acquired investment firm MGPA to bulk up its real-estate assets world-wide.
By acquiring MGPA, BlackRock gained control of its US$12 billion in assets under management, of which around two-thirds were in the Asia-Pacific region at the time of the deal.
The 46-story Asia Square Tower 2 building has one of the highest occupancy rates in the country and counts Mizuho Bank and insurers Allianz and Swiss Re among its tenants.
Rental income from premium Singapore office spaces showed signs of uptick in the second quarter after falling for eight consecutive quarters, real-estate advising firm CBRE Pte. Ltd. said.
“Economic indicators have firmed in recent months and, in tandem, prior fears around a supply overhang have also diminished as the new developments have been able to attract tenants,” CBRE said. However, a return to strong demand may take some more time, it said.
DBS Bank Ltd., J.P. Morgan Chase & Co. and HSBC are advising CapitaLand Commercial Trust on the rights issue.
Write to P.R. Venkat at [email protected]