Hongkong Land acquires 10.8% stake in Suntec REIT for $541 million

SINGAPORE - Property group Hongkong Land has acquired a 10.8 per cent stake in Suntec real estate investment trust (REIT) from ESR for $541 million, in its drive to grow its presence in Singapore’s prime commercial sector. 

In a statement on March 19, Hongkong Land said the acquisition will enable the group to deploy recently recycled capital into prime, income-producing commercial assets in the city-state.

“This aligns with the company’s positive outlook and conviction in Singapore’s prime commercial property market,” it said. “The yield derived from the company’s stake in Suntec REIT will contribute to the diversification of Hongkong Land’s earnings profile.” 

The acquisition follows a March 17 announcement of a strategic review of Suntec REIT’s portfolio by its new sponsor Tang Organization, owned by investors Gordon and Celine Tang.

Hongkong Land said Tang Organization’s acquisition of the Suntec REIT manager “creates an alignment of interest”, as the organisation now owns about 36 per cent of Suntec REIT units while also fully owning the REIT’s manager. It pointed to the planned strategic review, saying it aimed to “strengthen portfolio performance and enhance capital efficiency”, and cited the Tangs’ intention to “pursue strategic initiatives that may support a higher level of distributions in the coming years”.

Doubled the units bought

In a bourse filing on March 19, Hongkong Land said it had initially entered a sale-and-purchase agreement to acquire 145.8 million units in Suntec REIT. This represented a 4.9 per cent interest in the trust. The company subsequently amended the agreement to double its interest, acquiring just under 318 million units of Suntec REIT instead.

Hongkong Land said its acquisition was made at a discount to the trust’s net asset value of $2.03 a unit as at Dec 31. The 10.8 per cent stake was acquired from ESR, which divested its holding following the Tangs’ acquisition of the REIT manager.

“The company recognises Suntec REIT’s strategic potential to unlock value across its portfolio and (its) commitment to driving sustainable long-term growth for all unitholders,” it added. 

Assets under Suntec REIT’s portfolio include a 33.3 per cent interest in Marina Bay Financial Centre Towers 1 and 2, and One Raffles Quay – the same assets that Hongkong Land’s new private fund, Singapore Central Private Real Estate Fund, holds, with a 33.3 per cent interest. 

In an interview with The Business Times in early March, Hongkong Land chief financial officer Craig Beattie said that having recycled 90 per cent of its US$4 billion (S$5.1 billion) target and cut net debt by 30 per cent, the group now has ample balance-sheet headroom for new investments. In September 2025, it sold its Singapore and Malaysian property arm MCL Land for $738.7 million in cash. Most of the proceeds went into building a “war chest for future endeavours”.

Hongkong Land shares closed March 19 at US$8.02, down 3.14 per cent. It was among the worst performing stocks on the Straits Times Index. Units of Suntec REIT rose 2.7 per cent to close at $1.50 on March 20. THE BUSINESS TIMES