Singaporean property developer Tuan Sing Holdings has agreed to purchase the Sime Darby Centre commercial building from Stephen Schwarzman’s Blackstone and Malaysia’s Sime Darby Group for S$365 million ($260 million), according to a statement from Tuan Sing to the Singapore Exchange on Monday,
The New York-based Blackstone bought a 70 percent stake in the Bukit Timah commercial centre from Malaysia’s Sime Darby Group last year. The US alternative investment giant reportedly paid less than S$200 million ($142 million) for its stake in the 18,832 sqm (202,712 sq ft) property as part of an investment in three Singaporean assets that the Malaysian palm oil producer and property developer was selling to pare debt.
Project Site Could Contain Upside for Tuan Sing
Tuan Sing, which has a market capitalisation of over S$396 million on Singapore’s main board, could see potential from the Sime Darby Cente’s site on Singapore’s Dunearn Road. The current structure, which is approximately 80 percent office space with accompanying retail, is already around 96 percent occupied, according to Tuan Sing.
Greater upside for the diversified developer and property investor, which has a portfolio of residential, commercial, hotel and industrial projects in Singapore and China, comes from the property’s 140,886 square foot site. The part-freehold and part-999-year leasehold property is permitted for building up to 253,595 square feet, allowing Tuan Sing to potentially add to the existing space.
“The company believes that there is a significant potential for commercial activities that can serve the needs of the vast residential community in the vicinity. Therefore, the company is confident that the asset shall be an excellent investment that will generate long term revenue and profit to the company,” Tuan Sing said in its statement announcing the sale.
Property information provider Real Capital Analytics lists Tuan Sing Holdings as one of the top buyers of office space in Singapore, ranking 13th behind Ascendas REIT and above Evergrande. According to Tuan Sing’s annual report to shareholders, property accounted for 32 percent of the group’s revenue in 2016.
Singapore En Bloc Deals Continue Despite Supply of New Buildings
Blackstone’s sale of the Sime Darby Centre is the latest in a string of commercial asset disposals in recent months, despite (or because of) a bumper crop of new office buildings entering the market. Bloomberg reported last month that the Bukit Timah property was on the block, and the sale to Tuan Sing was announced less than 30 days later.
In February, banking giant DBS Group agreed to sell the PwC Building in Singapore’s financial district to Canadian insurer Manulife for S$747 million (then $525.7 million), and that transaction was preceded in November by CLSA Capital Partners’ purchase of the 77 Robinson Road office tower from SEB Immoinvest for S$530.8 million (then $373 million).
Reports last month indicated that CapitaLand had entered exclusive talks to acquire the superprime Asia Square tower 2 in Singapore’s Marina Bay area from BlackRock for as much as $2.34 billion.