Asia Square Tower 1 sets record deal

By
/ The Edge Property
|
June 10, 2016 9:00 AM SGT
Sovereign wealth fund Qatar Investment Authority (QIA) has purchased Asia Square Tower 1 for $3.4 billion (US$2.45 billion) from BlackRock. The deal announced on June 6 is said to be the single-largest office building transaction in the city-state and Asia-Pacific so far.
“The transaction will lead to increased confidence in the marketplace,” says Greg Hyland, head of capital markets Singapore at JLL. “There will definitely be more transactions in the next 12 months.” JLL and CBRE were joint advisers for BlackRock on the sale.
Hyland: The [Asia Square] transaction will lead to increased confidence in the
marketplace. There will definitely be more
transactions in the next 12 months.
Asia Square’s transaction price of $3.4 billion translates to $2,650 psf, with an estimated gross yield of more than 3%. “The successful closing of the deal with QIA could have been attributed to BlackRock’s willingness to lower the price slightly, as previous negotiations with CapitaLand and ARA Asset management at the $2,800-to-$3,000 psf range ended inconclusively,” says Christine Li, director of research at Cushman & Wakefield.
Completed in 2011, Asia Square Tower 1 is a 43-storey tower with 1.25 million sq ft of net lettable Grade-A office space. Citibank has been an anchor tenant in Tower 1 since 2011 and occupies nine floors totalling more than 250,000 sq ft. The second tower, the 46-storey Asia Square Tower 2, was completed in 2013. Tower 2 is a mixed-use complex with about 780,000 sq ft of Grade-A office space on the lower floors and a hotel spanning the 32nd to 46th floors.
Asia Square Tower 1 has just been sold for $3.4 billion, making it the single-largest office transaction this year
Developing core assets with exit strategy The two towers at Asia Square were built on two adjacent 99-year leasehold development sites on Marina...