A Manulife unit is buying a central business district (CBD) building as the Canadian insurer lifts its profile in Singapore.
DBS Group Holdings has agreed to sell the 28-storey PwC building at 8 Cross Street for $747 million to Manulife. The deal, to be completed next month, is based on an agreed property value of $747 million for the building and the repayment by Manulife of a $402.6 million loan.
The building constructed by DBS China Square in 1999 is said to have a net lettable area of 355,704 sq ft.
A Manulife spokesman told The Straits Times: "Having our own Manulife Building in a prominent location in the CBD will help us further strengthen the Manulife brand and provide greater brand visibility to consumers." Owning its office space will help Manulife manage occupancy needs and costs over the long term, she added.
Manulife plans to move into the building by early 2019, at the latest, and will occupy 120,000 sq ft initially. It now rents 110,000 sq ft of space at Manulife Centre.
Savills Singapore research head Alan Cheong said: "The sale shows there will be continued activity... in the office market, in spite of concerns about falling rental rates, compressing yields and rising interest.
"Most insurance companies in Singapore with Singapore dollar deposits would want to buy an asset that would yield a better return than Singapore Government bond rates."
Manulife has a deal with DBS under which it pays the bank $1.6 billion over 15 years to sell its insurance products to the bank's retail, wealth and small and medium-sized enterprise customers in four markets, including Singapore and Hong Kong.
Correction note: This article has been edited for clarity.