CICT Buying Singapore’s Paragon for $3.1B, Selling Asia Square 2 to IOI for $2B

Singapore’s largest commercial REIT has agreed to acquire the Paragon mall and medical complex on Orchard Road for S$3.9 billion ($3.1 billion), according to an announcement by CapitaLand Integrated Commercial Trust on Monday, in the city-state’s largest property transaction so far this year. 

The freehold integrated development, comprising 491,817 square feet (45,691 square metres) of retail space and a further 223,098 square feet of medical suites and offices, is valued at S$5,455 per square foot of net lettable area. The trust is acquiring the asset from Cuscaden Peak, an equal joint venture between Temasek-owned firms Mapletree Investments and CapitaLand, which took Paragon REIT private last year and marks the latest disposal from what had once been the portfolio of Singapore Press Holdings’s property division.

To fund the purchase, CICT is simultaneously selling Asia Square Tower 2 in Marina Bay to a unit of Malaysian developer IOI Properties Group, for S$2.48 billion ($1.9 billion), the trust said. The trust is selling the office block at a 9.9 percent premium to its most recent independent valuation with a 3 percent exit yield, while it is redeploying that cash into the Paragon at a 3.9 percent yield, according to the REIT’s manager.

“Paragon is a rare, premier freehold integrated development in the heart of Orchard Road,” said Tan Choon Siang, chief executive of CICT’s manager. “This acquisition strengthens the resilience and quality of CICT’s Singapore-focused portfolio, combining sizeable, upscale retail exposure with a defensive medical component, which is supported by strong structural tailwinds such as an ageing population and rising medical tourism.”

Mall Yields Appeal

Based on its 2025 net property income and adjusted for annualised January 2026 rental income, the acquisition yields 3.9 percent overall — 4.1 percent on the retail component and 3.4 percent on the medical and office component, CICT said. That implies an annual net property income of approximately S$152 million.

Located at 290 Orchard Road, the complex has a six-storey retail podium with two basement levels, and two office and medical towers of three and 14 storeys respectively. Paragon carries a BCA Green Mark Gold rating and was operating at 100 percent committed occupancy as at 31 January 2026, with over 190 retail and lifestyle brands and more than 80 multidisciplinary medical tenants, per CICT’s statement.

The total acquisition outlay, including acquisition fees payable in units and transaction costs, amounts to approximately S$3,919.0 million. CICT plans to fund the cash portion through a combination of debt, the net proceeds of a private placement announced on the same day targeting gross proceeds of at least S$600 million, and net proceeds from the Asia Square Tower 2 divestment.

On a pro forma basis assuming both transactions had been completed on 1 January 2025, the combined effect would be 2.1 percent accretive to CICT’s distribution per unit, lifting it from 11.58 Singapore cents to 11.83 cents, the manager said. Pro forma aggregate leverage is expected to rise modestly from 38.6 percent to 39.2 percent.

Paragon is one of the last assets held by Cuscaden Peak following a series of disposals since the privatisation of Paragon REIT was completed in May last year. 

Since taking the REIT private, Cuscaden has sold The Clementi Mall to Hines for up to S$584 million and sold Paragon REIT’s 85 percent stake in Westfield Marion Shopping Centre in Australia for A$125 million. The sale of the Paragon to CICT leaves Cuscaden with few remaining Singapore real estate assets from the former SPH REIT portfolio.

Asia Square Tower 2 Sells Again

Asia Square Tower 2, a 46-storey Grade A office building in Marina Bay completed in 2013, is being sold to IOI Marina View Pte. Ltd. for an agreed property value of S$2.48 billion, or approximately S$3,180 per square foot based on the 778,719 square feet of office and retail net lettable area. 

The price represents a 9.9 percent premium to an independent valuation of S$2,252.0 million carried out by Cushman & Wakefield as at 31 December 2025, according to the announcement. Estimated net sale proceeds after costs are expected to be approximately S$2,450.1 million.

The divestment excludes the Westin Singapore hotel within the complex, which is master-leased to an unrelated third party. The sale is expected to close in the second half of 2026, subject to shareholder approval at an extraordinary general meeting of the purchaser and relevant tax clearance from the Inland Revenue Authority of Singapore.

The tower has changed hands at a significant premium to CICT’s entry cost. CapitaLand Commercial Trust, the predecessor vehicle later merged into CICT, acquired Asia Square Tower 2 from a BlackRock-managed fund for S$2.09 billion, or S$2,689 per square foot, in 2017 — at the time the largest office transaction in Asia Pacific that year. The disposal represents an 18 percent appreciation on that acquisition price over nine years.

The sale adds to a sequence of large transactions in Singapore’s city centre office market. In December 2025, Keppel REIT agreed to buy a one-third interest in Marina Bay Financial Centre Tower 3 from Hongkong Land for S$1.45 billion, pushing its stake in the building to two-thirds. That deal was followed in February 2026 by Hongkong Land’s launch of the Singapore Central Private Real Estate Fund with assets of S$8.2 billion, seeded with its stakes in Marina Bay Financial Centre Towers 1 and 2, One Raffles Quay, One Raffles Link, and the Qatar Investment Authority’s Asia Square Tower 1, with QIA and APG Asset Management as founding investors.

IOI Expands Singapore Office Portfolio

For IOI Properties Group, the acquisition of Asia Square Tower 2 significantly deepens the Bursa Malaysia-listed developer’s footprint in Singapore’s Marina Bay precinct. The Malaysian group already owns IOI Central Boulevard Towers, a major office development that opened in 2024 after IOI paid S$2.57 billion for the site in a government land tender in 2016, and recently completed the acquisition of full ownership of the South Beach mixed-use development, paying approximately S$835 million for City Developments’ 50.1 percent stake.

IOI Properties has been in discussions with advisers about listing a Singapore REIT on the SGX, which sources told Reuters in November 2025 could cover assets valued at S$7 billion to S$8 billion and might include South Beach Tower, South Beach Avenue and IOI Central Boulevard Towers, with a target listing date of 2027. The addition of Asia Square Tower 2, if injected into such a vehicle, would push the potential portfolio to a materially larger scale.

The Westin Singapore hotel within the Asia Square Tower 2 complex, which is excluded from the transaction, is held by Daisho Group of Japan, which acquired it from BlackRock in 2013 prior to the tower’s sale to CCT.

Unitholders of CICT will be asked to vote on the Paragon acquisition at an extraordinary general meeting expected to be held in the second or third quarter of 2026, with completion of the acquisition expected in the third quarter of 2026.