ESR in Talks to Sell Shanghai Office Asset to Bank of East Asia at 39% Off

ESR is negotiating the sale of a slice of a Shanghai office tower for around RMB 1.6 billion ($231 million) as the investment manager continues to dispose of assets acquired through its $5.2 billion buyout of Singapore’s ARA Asset Management in 2022.

The industrial specialist is in talks to sell around 41,000 square metres (441,320 square feet) of office space in BEA Finance Tower in the Lujiazui financial district for about RMB 40,000 ($5,778) per square metre, according to sources familiar with the matter.

While the market has recorded few deals which would provide comparable transactions, one source described the pricing as very low. Should the transaction take place at the reported rate, ESR would be disposing of the asset in Shanghai’s most expensive commercial hub at a 39 percent discount from the RMB 2.7 billion which ARA paid to acquire the property in 2015. 

In recent weeks ESR has closed on its sale of the manager of Suntec REIT, sold a 10.8 percent stake in the SGX-listed trust, and disposed of an office tower near Shanghai’s Xintiandi area, with all of those assets also having been inherited through the ARA takeover.

Owner-Occupier Deal

The prospective buyer of the Pudong office space is Hong Kong-based Bank of East Asia, according to the sources. With its name already on the 42-storey office building, the bank had previously acquired ten floors in the tower, which also serves as its mainland China headquarters.

Located at 66 Huayuanshiqiao Road, BEA Finance Tower has a gross floor area of about 75,000 square metres, including a five-storey retail podium. The tower connects directly to Lujiazui metro station and neighbours major commercial buildings including Citigroup Tower and Mirae Asset Tower.

Current asking rents in the tower range from RMB 210 to RMB 255 per square metre per month for standard units, with premium space priced between RMB 270 and RMB 360, according to agent listings.

Bank of East Asia acquired 19,600 square metres of office and retail space in the project in 2008 for about RMB 1 billion from Gaopeng (Shanghai) Real Estate Development, according to local media reports, with the purchase also including naming rights to the tower.

Should the latest deal proceed, the bank would be acquiring more than twice the space it purchased in 2008 at a 22 percent reduction in unit price, increasing its ownership of the building to roughly 80 percent.

Individual owners hold the remaining space in the tower, according to local media accounts, with those holdings not included in the proposed transaction.

ESR and BEA had not responded to Mingtiandi’s requests for comment on the deal by the time of publication.

ARA Asset Close-Out

The BEA Finance Tower disposal comes as nearly a quarter of Shanghai’s grade A office space stood empty at the end of December, according to Cushman & Wakefield. Grade A office rents across the city fell 9.8 percent in 2025, according to the firm, which expects leasing rates to continue declining in 2026 as the market absorbs a wave of new supply.

An ESR-managed fund backed by a major US pension fund sold the Platinum Tower near Shanghai’s Xintiandi area in February for RMB 1.62 billion ($233 million), with that sale price representing a 43 percent discount from the RMB 2.85 billion the vehicle paid to acquire the office block in 2015.

With ESR having completed its divestment of the manager of Suntec REIT to Gordon Tang’s Acrophyte Asset Management on 17 March, Hongkong Land announced two days later that it had agreed to buy ESR’s 10.8 percent stake in the SGX-listed trust for S$541 million ($422 million).

ESR had acquired both the REIT stake and ownership of the manager through the ARA acquisition.

Following the string of disposals, ESR continues to control the managers of Hong Kong-listed Fortune REIT and Prosperity REIT, both acquired through the ARA deal.