BlackRock sells Singapore office tower to CapitaLand for US$1.5bil

SINGAPORE: CapitaLand Commercial Trust, Singapore’s biggest office landlord, agreed to buy BlackRock Inc’s Asia Square Tower 2 for US$1.5bil (RM6.5bil) in the city’s second largest ever sale of an office building.

The transaction will be partially funded by a rights issue of about S$700mil and bank borrowings of about S$1.12bil, CapitaLand Commercial Trust said in a statement. The company said divestment proceeds of about S$340.1mil from previous property deals will also help fund the purchase.

The sale is the latest in a series of blockbuster commercial property deals in Singapore. Qatar Investment Authority, the gulf state’s wealth fund, last year bought the adjacent Tower 1 from BlackRock for S$3.4bil in what was Singapore’s biggest office transaction.

“The deal provides another pricing benchmark which reconfirms that the recovery in office rents and prices is well underway in Singapore,” said Jeremy Lake, executive director of capital markets at CBRE Inc in Singapore.

CBRE was one of the advisers to BlackRock. A Malaysian-led group last year paid S$2.6bil for a rare plot in the Marina Bay district, while FWD Group, an insurance company backed by Hong Kong bilaire Richard Li, in May bought a 50% stake in One George Street from CapitaLand Commercial Trust for S$592mil.

The partial sale of the One George Street office tower will help fund part of the purchase from BlackRock, along with proceeds from sales of the Golden Shoe Car Park and Wilkie Edge, an office and retail complex, CapitaLand Commercial said.

The 46-story Tower 2, spread over 778,719 sq ft, includes office space and a Westin hotel.

The building has been on the market since last year. The Westin wasn’t a part of the sale.