BlackRock, Malaysia’s YTL Buying Citadines Raffles Place From CapitaLand JV for $216M

CapitaLand Integrated Commercial Trust on Friday announced a deal to sell the residential element of downtown Singapore’s CapitaSpring building for S$280 million ($216.2 million), with market sources confirming asset management titan BlackRock and Malaysia’s YTL Corp as the buyers.

SGX-listed CICT holds a 45 percent stake in Citadines Raffles Place, a 299-unit serviced residence asset, under a joint venture with Temasek-owned CapitaLand Development and Japanese giant Mitsubishi Estate. CICT’s estimated net proceeds from the transaction, which is expected to close during this quarter, amount to S$37.8 million, with an exit yield of 3.6 percent, the trust’s manager said in a release.

Tan Choon Siang, chief executive of the manager, said the REIT was divesting Citadines Raffles Place at a premium to its last valuation of S$278.5 million.

“This reflects our disciplined approach to portfolio reconstitution, enabling us to redeploy capital into more DPU-accretive opportunities and strengthen CICT’s leadership position as the proxy for Singapore commercial real estate,” Tan said. “We will continue to seek opportunities to enhance the resilience and quality of our portfolio, creating sustainable value for our unitholders.”

Potential Hotel Conversion

Mingtiandi reported last August that talks between BlackRock and the serviced residence’s owners had entered the final stages, with sources Friday indicating that the deal’s progress was slowed by questions over permissions and licensing, as the world’s largest asset manager may be keen to convert Citadines Raffles Place into a hotel.

Sources familiar with the discussions told Bloomberg in October that the hotel division of YTL, a Kuala Lumpur-listed builder controlled by tycoon Francis Yeoh, was seeking to acquire a minority stake in the section of CapitaSpring alongside BlackRock, with the buyers likely to repurpose the asset to allow for single-night stays.

Operated by CapitaLand’s The Ascott residential division, Citadines Raffles Place occupies floors nine to 16 of the 51-storey CapitaSpring tower. The new owners are acquiring the property at the equivalent of S$936,455 per key for the 299 units ranging in size from 215 to 646 square feet (20 to 60 square metres).

CapitaSpring’s office element is anchored by US investment bank JP Morgan, with Sumitomo Mitsui Banking Corp, JLL and White & Case also occupying the prime tower. Citadines Raffles Place opened in October 2022 just after Singapore emerged from COVID-19 lockdowns.

The joint venture partners developed the tower on the former site of the Golden Shoe car park at 88 Market Street after acquiring the plot in 2017.

Singapore Living

The Citadines Raffles Place buy follows BlackRock’s acquisition last year of another property under the same brand.

In that first-quarter deal, the $11.6 trillion asset manager joined with rental accommodation specialist Weave Living to acquire Citadines Mount Sophia from CapitaLand Ascott Trust for S$148 million.

The latest transaction also marks the first deal announced by CICT under the leadership of CEO Tan, as the poker enthusiast took the helm of the trust’s manager on Thursday this week.

Note: This article has been updated to clarify that CICT’s joint venture partners in CapitaSpring are Mitsubishi Estate and CapitaLand Development. An earlier version had not specified which branch of CapitaLand Group was involved. An earlier version of the story also referred to Tan Choon Siang as a former poker professional. It has been updated to indicate Tan as a poker enthusiast, as his involvement in poker competitions has not been on a professional basis.