Blackstone eyes more Singapore property after buying Sandcrawler building for $176m

The Sandcrawler deal marks Blackstone's first Singapore property acquisition under its "core plus" strategy.
The Sandcrawler deal marks Blackstone's first Singapore property acquisition under its "core plus" strategy.PHOTO: ST FILE

SINGAPORE (BLOOMBERG) - Blackstone Group is seeking to invest in more properties in Singapore to capitalise on rising demand for office space among technology firms expanding in the city-state.

The plans come after the US private equity firm announced on Wednesday (April 21) that it is purchasing Lucasfilm's state-of-the art facility, The Sandcrawler, for $176 million, confirming a Bloomberg report in January.

Blackstone is seeking to make long-term investments in high-quality assets that provide strong returns, Mr Alan Miyasaki, head of Asia real estate acquisitions, said in an interview. That would require having a strong roster of tenants, such as those in the Sandcrawler, which houses the Walt Disney Co and the Government Technology Agency.

The move underscores the attraction of Singapore's property assets to foreign investors as the financial hub broadens its appeal for tech firms. US giants Amazon.com and Facebook and their Chinese counterparts Alibaba Group Holding and ByteDance are among companies that are making the city-state a beachhead for South-east Asia.

The Sandcrawler deal marks Blackstone's first Singapore property acquisition under its "core plus" strategy, where it currently has US$3.6 billion (S$4.8 billion) in assets under management in Asia. Located in the country's largest business park, the building was inspired by the Sandcrawler fortresses in the Star Wars movies, and was used by Lucasfilm.

Tech companies are keen to take up space in low-rise buildings in business parks, and not necessarily skyscrapers in the financial district, Mr Miyasaki said. He pointed out that Grab Holdings and Sea Ltd's e-commerce business Shopee have offices in the area where the Sandcrawler is located.

"It used to be that the tall skyscrapers were really cool," Mr Miyasaki said. "If we can buy five more Sandcrawlers, we would do that."

More tech and content companies will expand their presence in Singapore over time, he said, citing its ability to protect intellectual property as one reason. Geopolitical tensions elsewhere also make the country a relatively attractive option.

Singapore is "the one place everybody agrees on", Mr Miyasaki said. "This is like the Switzerland of Asia."