Bain Capital Buys Singapore Worker Housing From Blackstone for $555M

Bain Capital continues to expand its Asia Pacific real estate commitments with the US private equity firm having acquired a Singapore worker housing portfolio from Blackstone, according to sources familiar with the transaction who spoke with Mingtiandi.

Bain has acquired the Avery Lodge portfolio, a set of four purpose-built worker dormitory compounds from Blackstone for S$750 million ($555.5 million) per information from data provider MSCI Real Assets, after the properties were first put on the market in mid-2024.

The recently completed deal allowed Blackstone to nearly double the S$380 million =it paid to acquire the 1,709-unit portfolio from Morgan Stanley in 2010, according to records seen by Mingtiandi, as an influx of foreign labour has driven a spike in worker housing rents.

Leasing rates for worker housing jumped by an average of 10.8 percent in the second half of 2024, according to a recent report by industry group the Dormitory Association of Singapore and Knight Frank, with the study linking the upswing to a shortage of beds.

Serving Industrial Hubs

Bain Capital was pegged as the lead bidder for Avery Lodge late last year, according to a November report by Bloomberg, with the company said to have bested offers from rivals Brookfield Asset Management and Apollo Global Management.

On Wednesday, Bloomberg reported that Bain Capital is raising a S$460 million loan to finance its purchase of Avery Lodge, indicating that Barclays Plc, CTBC Bank, Standard Chartered Plc and United Overseas Bank Ltd are  arrangers of the five-year facility, which will be syndicated to the broader market.

Located at 2D Jalan Papan in Jurong in western Singapore, the portfolio’s namesake asset, Avery Lodge, has 486 units across five buildings and was built in 2009 as an “upmarket” worker housing compound with each unit having its own living, dining and kitchen areas. All four assets in the set are situated near some of the city-state’s largest industrial clusters.

Blackstone is believed to have invested in the Avery Lodge portfolio through the first edition of its Tactical Opportunities Fund, which closed fundraising in 2012. Blackstone had retained Barclays to market the properties.

The portfolio also includes the Kian Teck Dormitory, an 11-building compound with 411 units which is located about five kilometres (3.1 miles) west of Avery Lodge in the Pioneer neighbourhood. In northeastern Singapore the basket of properties includes the 404-unit Tampines Dormitory with the 408-unit Woodlands Dormitory serving the northern fringes of the island.

The portfolio, which can accommodate over 20,000 beds or more than 10 beds per unit, provides a scalable worker housing platform, which can be improved further through asset enhancement initiatives, according to analysts.

Morgan Stanley had invested roughly S$260 million assembling the portfolio, having purchased three of the properties from Singapore industrial land regulator, JTC Corp in 2007, and developed the fourth and largest asset, Avery Lodge, two years later, according to media reports at the time.

Rents, Capital Values on the Rise

Singapore’s construction, shipyard and Industrial chemical processing industries employed 442,900 foreign labourers in June last year, with the city-state having a worker housing stock of 439,198 beds at the end of 2024, according to the Dormitory Association of Singapore and Knight Frank report.

This shortfall comes as a wave of redevelopment in Singapore is expected to bring in a fresh wave of imported labour and regulatory-driven upgrades force some operators to shut down existing worker facilities for renovations.

Given the market conditions the report predicts that worker housing rents in Singapore should increase by 5 to 8 percent this year while capital values in the sector should also continue to rise.