BlackRock has confirmed the sale of Asia Square Tower 1 to the Qatar Investment Authority (QIA) for S$3.4 billion ($2.45 billion). The US alternative investment manager and the Qatari sovereign wealth fund announced the sale in a joint release this morning.
“We are proud to have developed Asia Square from the ground up after the land acquisition in Marina Bay, and leased the property to an excellent tenant base,” commented John Saunders, Head of APAC for BlackRock Real Estate commented. “We are very pleased with the sale, and look forward to working closely with Qatar Investment Authority to maintain the pre-eminent status of Asia Square.”
The sale of the 1.29 million square foot (120,000 square metre) LEED Platinum office property marks the largest single-tower real estate transaction in Asia Pacific to date, and the second largest single-tower real estate transaction globally, according to BlackRock.
JLL and CBRE are joint sole advisors for this transaction for BlackRock. The potential sale was reported on Mingtiandi yesterday.
BlackRock Sells as SG Office Market Gets More Competitive
The tower, which bears the branding of its anchor tenant, US financial giant Citibank, is being sold for the equivalent of S$2,636 per square foot of net lettable area. The 43-storey structure, which also includes over 39,000 square feet of retail space, is said to be 83 percent occupied at present after opening its doors in 2011. Other major tenants of the The LEED Platinum project include Google, US law firm White & Case and Lloyd’s of London.
The sale comes as rents in Singapore’s Marina Bay area are under downward pressure, and Google, which currently occupies 120,000 square feet at Asia Square Tower 1 is set to relocate to a new corporate campus at the Mapletree Business City II project in suburban Singapore later this year.
MGPA Asia Fund III acquired a 99-year leasehold on the land for Asia Square 1 in September 2007 for S$2.02 billion, or S$1,409 per square foot – a record price at the time. The asset, along with its sister project Asia Square 2, which MGPA bought in December 2007, passed to BlackRock in 2013 when it acquired the Australian real estate private equity firm.
MGPA Asia Fund III was renamed as BlackRock Asia Property Fund III after the acquisition, and is said to expire in mid-2017.
One Year of Talks Result in Record Price
The reported agreement between BlackRock and Qatar’s sovereign wealth fund comes one year after the US firm was first reported to have put the building up for sale at an asking price of S$4 billion. Since BlackRock first began entertaining expressions of interest, the proposed transaction has gone through several rounds of negotiations.
Singaporean development giant CapitaLand announced to the country’s stock exchange last November that it was ceasing negotiations with BlackRock to acquire the property, after a consortium led by CapitaLand and Norway’s Norges Bank Investment Management announced as the preferred bidder for the asset in early October.
Exclusive negotiations between BlackRock and Singapore-based ARA Asset Management also ended with no deal in March this year. The Li Ka-shing-backed real estate fund manager had reportedly been leading a consortium that included Korean sovereign fund KIC, which had first offered to buy 100 percent of the asset, then adjusted its offer to acquire a 66 percent of the property, before talks expired without an agreement.