Sep 22, 2017
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CapitaLand Commercial Trust (CCT) is set to enter the upscale Marina Bay office market, with the $2.1 billion purchase of Asia Square Tower 2 (pictured) from BlackRock Asia Property Fund III.

“The market has been eagerly awaiting the confirmation of this deal. It provides another pricing benchmark which reconfirms that the recovery in office rents and prices is well underway,” said Jeremy Lake, Executive Director for Capital Markets at CBRE, one of the agencies that advised on the deal.

In fact, there are two property owners who have been tracking this massive transaction before making a decision whether to sell their own buildings in Singapore. There were also many local and overseas investors asking CBRE about office investment opportunities here in the past few months, he noted.

According to an SGX filing on Thursday (21 September), the selling price translates to $2,689 psf based on the property’s net leasable area (NLA) of 778,719 sq ft, of which 88.7 percent is occupied as of 30 June 2017.

Completed in September 2013, Asia Square Tower 2 it is among the newest buildings in Marina Bay. The 46-storey mixed-use project features Grade A office space, The Westin Singapore five-star hotel and a retail podium spanning two levels.

CCT intends to fund the acquisition by borrowing $1.12 billion from banks and use proceeds of about $340.1 million from the sale of Wilkie Edge shopping mall and Golden Shoe Car Park, as well as a 50 percent stake in the One George Street tower, all in Singapore. Moreover, it plans to carry out a fully-underwritten and renounceable rights issue to raise $700 million in gross proceeds.

“The addition of Asia Square Tower 2 is a strategic move that is in line with our portfolio reconstitution strategy to rejuvenate CCT’s portfolio with the addition of newer and higher yielding Grade A assets,” said Soo Kok Leng, chairman of CCT’s manager.

“One George Street and Wilkie Edge, which were divested at exit yields of 3.2 percent and 3.4 percent per annum respectively, will be replaced with the higher-yielding Asia Square Tower 2 at an initial rate of 3.6 percent.”

The transaction is expected to be closed by November 2017 or another date agreed by both parties. Upon completion of the deal, CCT will strengthen its position as Singapore’s biggest landlord of prime office space with a total NLA of approximately 3.5 million sq ft.


Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email

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