BlackRock Selling Singapore Industrial Asset to AEW for $107M

Singapore real estate assets continue to be in style with the world’s biggest investors with Mingtiandi able to confirm that BlackRock is on the verge of selling an industrial asset in the city-state to Boston-based fund manager AEW.

BlackRock is set to dispose of Admirax, a seven-storey light industrial building for S$142 million ($107.3 million) less than three years after buying the property in northern Singapore’s Woodlands district, according to sources who spoke with Mingtiandi.

The deal between the pair of US fund management heavyweights is set to be signed just one month after a fund backed by Allianz Insurance agreed to spend $477 million to buy a half-stake in a prime Singapore office asset with many global investors having targetted the Lion City as Asia’s top destination for acquisitions this year.

34% Mark-Up After Two Years

At the reported consideration, BlackRock is achieving a 34 percent mark-up after its two years managing the property, which measures 469,150 square feet (43,585 square metres) by net lettable area.

Inquiries to BlackRock representatives went unanswered at the time of publication and AEW declined to comment. CBRE’s Singapore industrial department is understood to have represented BlackRock in the discussions, although representatives of the consultancy also declined comment. News of the deal was first reported in Singapore’s Business Times.

Zoned for Business 1 use by Singapore’s Urban Redevelopment Authority, the current structure has used up all of the floor area permitted for its 233,000 square foot plot at 8 Admiralty Avenue with AEW paying the equivalent of S$303 per square foot to acquire the asset.

Since acquiring the 2009-vintage property from Ascendas-Singbridge in April 2018, BlackRock has completed enhancements to public areas, with nearly 40 years remaining on the project’s 60-year leasehold.

The property is located around two kilometres (1.24 miles) from Sembawang MRT station, and also includes a food court and day care centre.

During its two years look after the Admirax building, BlackRock is said to have boosted occupancy to 85 percent, with leasing dominated by industrial technology and biomedical tenants including Atlas Copco distributor Indpro, electronic component firm Capcon and medical R&D provider Merlin MD.

Singapore in Style

AEW’s pending purchase of Admirax would be the fund manager’s first major acquisition in Singapore after it agreed to pay S$1.025 billion in April 2019 to purchase the office element of Chevron House, a 32-storey commercial tower at Raffles Place.

Later that same year AEW filed documentation with the United States Securities and Exchange Commission to begin raising capital for AEW Value Investors Asia IV, the fourth edition of its Asia value-add real estate strategy.

Since those 2019 milestones Singapore has gained in popularity with the world’s largest fund managers as the city’s relatively successful management of the COVID-19 pandemic has further burnished its reputation as a safe investment haven. A poll by the Urban Land Institute (ULI) late last year had the real estate organisation’s respondents rating Singapore as the top investment destination for the second year running.

Allianz Real Estate’s announcement last month that its AREAP Core I fund was purchasing half of the OUE Bayfront office building despite the pandemic further reinforced investor confidence in Singapore real estate.

That confidence is also evident in the industrial sector where Singapore-listed AIMS APAC REIT late last month announced an agreement to acquire the Sime Darby Business Centre in western Singapore for S$102 million.

Also last month Blackstone agreed to buy a business park asset in Singapore’s One-North tech park from Disney’s Lucasfilm unit for S$178.5 million.

Note: This story has been updated to show that Allianz Real Estate had invested in the OUE Bayfront project via the AREAP Core I fund, an earlier version had cited the AEW Value Investors Asia IV fund. Mingtiandi regrets the error.