M&G Real Estate has agreed to pay approximately S$400 million ($295 million) to forward fund an office building being developed by engineering and infrastructure consulting firm Surbana Jurong in Singapore, according to an announcement late this past week by the UK investment manager.
The agreement gives M&G ownership of the 68,915 square metre (742,000 square foot) business park property in Singapore’s Jurong Innovation District, with Surbana Jurong agreeing to fully lease the seven-storey block from M&G “on a long-term basis.”
The Surbana Jurong Campus, which broke ground on Friday, is being developed by Surbana Jurong on a piece of land purchased by M&G, which made the investment via its Asian core strategy under veteran fund manager Richard van den Berg.
Develop and Lease-Back Deal
“We are delighted to include such a high quality asset such as Surbana Jurong Campus that is in line with our strategy for low risk, predictable, and sustainable income,” M&G’s van den Berg said in a statement. “The property is backed by a top-tier tenant and is well positioned to benefit from government-driven initiatives to develop high value-adding industries in this new business district.”
When completed in 2021, the building will serve as Surbana Jurong’s new global headquarters, giving the Temasek Holdings-backed consulting company room to accommodate up to 4,000 staff. The project has been designed by Safdie Surbana Jurong, a partnership established in 2017 with architect Moshe Safdie. to meet Singapore’s Building and Construction Authority’s (BCA) Green Mark Platinum Certification for Super Low Energy Building.
The headquarters building is located in the city’s Jurong Innovation District, a major Singapore government initiative to build a tech-centred industrial park in western Singapore. The first phase of the industrial park is scheduled to be completed in 2022.
M&G Goes for Singapore Business Parks
The deal marks M&G’s first investment in a business park asset in Singapore, and comes around a year and a half after van den Berg joined the company from CBRE Global Investors.
M&G Real Estate, which manages £31.7 billion in assets is the property investment division of M&G Investments, a unit of M&G Prudential.
In November last year, M&G Real Estate acquired a portfolio of Japanese residential buildings for $83.7 million, after the company invested $1 billion in July of 2018 to purchase the Centropolis Towers office complex in Seoul.