M+S selling office, retail areas of Duo complex for $1.6b

The national joint venture between Malaysia and Singapore is divesting part of a signature mixed-use project in the Ophir-Rochor precinct, as reported in May.

M+S will sell the office and retail areas of the Duo complex for $1.575 billion, or $2,570 per square foot (sq ft) of net lettable area, it said last night.

The sale to Allianz Real Estate and Hong Kong private equity firm Gaw Capital Partners comprises Duo Tower, an office block with 570,000 sq ft of prime Grade-A commercial space, and Duo Galleria, with 56,000 sq ft of retail.

But Andaz Singapore - a Hyatt-branded luxury hotel that occupies the top 15 floors of Duo Tower - will remain in M+S's hands.

The Duo development, which sits on land with a 99-year lease, also includes 660 apartments.

M+S is 60 per cent-owned by Malaysian sovereign wealth fund Khazanah Nasional, with the rest held by Singapore investment firm Temasek Holdings. The developer also continues to own the mixed-use Marina One in Marina Bay.

OPTIMISM APLENTY

After our acquisition of the 77, Robinson Road building in January, this deal marks our second major office transaction in Singapore in 2019 and signifies our continued optimism towards the office market here.

MR KENNETH GAW , Gaw Capital Partners president and managing principal, on the Duo deal.

The ground was laid for Duo and Marina One in a landmark 2010 land-swop deal that saw Malaysia hand over former Malayan Railway land parcels in Tanjong Pagar, Kranji, Woodlands and Bukit Timah, in exchange for the Ophir-Rochor and Marina South sites.

M+S chief executive Kemmy Tan said in a statement that the firm still sees "tremendous growth opportunity" for Duo's hotel component.

"M+S will continue to own and manage Andaz Singapore and the Marina One assets to the optimal level for our shareholders," she added.

Meanwhile, Gaw Capital Partners president and managing principal Kenneth Gaw called the Duo deal "an important milestone for Gaw Capital in the Singapore real estate market".

"After our acquisition of the 77, Robinson Road building in January, this deal marks our second major office transaction in Singapore in 2019 and signifies our continued optimism towards the office market here," he added.

Gaw Capital Partners, which focuses on real estate private equity, paid a CLSA Real Estate fund nearly $710 million for the Robinson Road office block.

Its other assets in the Bugis district, near Duo, are Hotel G in Middle Road, and the office and retail complex PoMo in Selegie Road that it bought with Allianz in 2017.

A version of this article appeared in the print edition of The Straits Times on July 30, 2019, with the headline 'M+S selling office, retail areas of Duo complex for $1.6b'. Print Edition | Subscribe