Sovereign wealth fund Qatar Investment Authority buys Asia Square Tower 1 for record $3.4b

Asia Square Tower 1 in Singapore's Marina Bay business and financial district. PHOTO: ASIA SQUARE

SINGAPORE - Sovereign wealth fund, Qatar Investment Authority (QIA), has agreed to buy Asia Square Tower 1 in Singapore's Marina Bay business and financial district from US private equity giant BlackRock for a record US$2.45 billion (S$3.4 billion).

According to data compiled by JLL, the sale represents the largest single-tower real estate transaction in Asia Pacific to date, and the second-largest single-tower real estate transaction globally.

The deal is also the biggest in Singapore in terms of dollar amount and square footage with QIA paying US$1,960 (S$2,667.5) per sq ft. JLL and CBRE jointly advised BlackRock on the deal.

John Saunders, head of Asia Pacific for BlackRock Real Estate, told the FT that he believed concerns about looming office supply in Singapore were overstated because there was little more building expansion on the horizon.

"I have a feeling we might look back at this point and say 'that marks the recovery point' for the market," he was quoted as saying. "We have dry powder in new funds that we've raised and we're actively looking at new properties in Singapore."

The 43-storey tower comprises more than 1.2 million square feet of Grade A office space and nearly 40,000 square feet of retail space.

Said Jeremy Lake, CBRE executive director, investment properties: "We courted some of the world's largest funds and leading investors for this exercise and without exception, all of them were in agreement that Asia Square is a premium office asset.... Marina Bay is Singapore's equivalent to London's Canary Wharf or Shanghai's Liujiazui. The buyer and seller can walk away from this deal smiling as both have achieved excellent outcomes."

Current tenants of Asia Square Tower 1 include financial services companies Citibank and Julius Baer as well as insurance firm Marsh & McLennan.

"Singapore continues to be an attractive destination for international investors, thanks to its stable political outlook, superior infrastructure and strong economic fundamentals. Following this flagship transaction, we expect there will be increasing investor interest in Singapore prime office stock in the coming months," says Greg Hyland, Head of Capital Markets, Singapore, JLL. "Looking beyond Singapore, we are seeing a growing demand from global investors looking for major single asset opportunities in the region such as Asia Square."

JLL has been the sole leasing agent and property manager of Asia Square since it opened in June 2011.

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