One of the world’s biggest private equity firms is pushing its real estate bets into the fantasy world, as recently filed documents show that Blackstone is in the process of buying a Singapore building based on George Lucas’ Star Wars movies.
The Manhattan based firm is offering to pay S$178.5 million ($135 million) to purchase 1 Fusionopolis Link, better known as the Sandcrawler Building, from a unit of Lucasfilm, according to sources familiar with the deal, which was first reported by Bloomberg.
The eight-storey building is located close to the University of Singapore in the One North tech park, and is designed to look like the Sandcrawler, a tank-treaded fortress where Luke Skywalker purchased R2D2 in the original Star Wars film.
Despite its fantasy world connections, Blackstone’s pending purchase of the building fits the firm’s practice of investing in suburban business park properties in Asia, as rising asset values continue to squeeze yields for office buildings in central business districts. One North, which is home to a host of biomedical and other tech firms, has been promoted by the government as the city’s hub for global tech giants.
Buying Yoda’s Singapore Home
Blackstone’s deal to purchase the 22,500 square metre (242,188 square foot) asset is still pending approval by Singapore’s Jurong Town Corporation, which serves as the government’s regulator of industrial development. At the reported compensation, the Manhattan-based firm would be paying the equivalent of S$737 per square foot for the asset. CBRE is said to have brokered the deal, including introducing Blackstone as the buyer.
Once completed, the fund manager would gain control of Disney’s largest base in the Southeast Asian nation, with Industrial Light and Magic – the effects division of Lucasfilm – occupying the building alongside ESPN and other units of the conglomerate that Mickey built. Vacancy in the building is said to be less than 10 percent, according to an account in Singapore’s Business Times.
After Lucasfilm had agreed to purchase the 30-year leasehold site in 2010, the company broke ground on the building, which received a gold plus certification under Singapore’s Greenmark scale for sustainable buildings, in 2011. The site carries with it an option to extend the leasehold for an additional 30 years.
Completed in 2013, the Aedas-designed facility includes a 100 seat theatre with a facade inspired by Darth Vader’s helmet, and a fountain adorned with a sculpted Yoda, to add some movie magic to Lucasfilm’s regional headquarters.
One North Heats Up
The Sandcrawler is part of the Fusionopolis cluster in One North, a set of tech campuses in the western Singapore project, which is also home to Canon, Oracle and Fox Networks.
Last year CapitaLand-managed Ascendas REIT paid S$102.91 million to acquire a 25 percent stake in the Galaxis building in Fusionopolis, which is located across the street from the Sandcrawler. In that transaction, the SGX-listed trust paid the equivalent of S$629.5 per square foot to acquire the quarter-stake not already controlled by its sponsor, CapitaLand.
Singapore’s largest developer placed another bet on One North’s potential in September last year when it revealed plans for Rochester Commons, a 400,000-square foot research and knowledge hub in the master-planned development. CapitaLand says it plans to spend a total of S$550 million developing that facility, which is scheduled for completion late this year.
Biz Park Bets
For Blackstone, the bet on a tech-occupied office project is aligned with similar investments that the firm has made in India and China in recent years.
After investing in a portfolio of business park projects together with India’s Embassy Group, the fund manager benefited from the launch of India’s first real estate investment trust, with the $773 million launch of Embassy Office Parks REIT in 2019.
Then just last November, the firm led by billionaire Stephen Schwarzman agreed to buy another 21 million square feet of India office projects from the country’s Prestige Group in a $1.5 billion deal.
In 2018, Blackstone picked up a set of 5 business park properties in China from Singapore’s Mapletree as part of a $1.25 billion Shanghai investment.