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ARA-led bid loses exclusivity on Asia Square

The exclusivity period granted by the tower's owner BlackRock to the bidder has reportedly come to an end with no definite conclusion.  

The long awaited sale of the Asia Square Tower 1 by BlackRock Real Estate continues to hang in the balance with the expiry of the exclusive negotiation period granted to a consortium led by ARA Asset Management, the Singapore-based real estate fund manager.

According to a report in the Business Times, the exclusivity period has ended without a deal being concluded to acquire the 1.23 million square foot office tower in Singapore’s Marina Bay area.

The Korea Investment Corporation, the Korean sovereign wealth fund, is reportedly part of the club that emerged as a likely buyer for the property after the Singapore-listed property developer CapitaLand pulled out of negotiations in November last year. KIC declined to comment when approached by PERE.

A BlackRock spokesperson did not directly comment on the expiration of exclusivity but said: “Asia Square is a trophy grade-A office building in Singapore, often considered as one of Asia’s best such developments, and negotiations with potential buyers of this asset continue. While we are not in a position to comment on the details, we are pleased to have received significant global interest in this high-quality asset and are currently working to achieve the best outcome for our investors.”

BlackRock had put the Asia Square Tower 1 on the market early last year with an asking price of around S$3.5 billion (€2.3 billion; $2.5 billion) to S$4 billion.

According to multiple sources, a consortium of CapitaLand and the Norges Bank Investment Management (NBIM) had emerged as the preferred bidder after the initial bidding process ended in October last year. However a month later CapitaLand pulled out of negotiations. PERE understands that concerns with regards to certain representations and warranties within the contract to buy the asset became a deal-breaker.

In February this year at its results briefing, CapitaLand executives told the press that the reason behind dropping the bid for Asia Square was because the property did not fit with its group strategy.

“Whether it is Asia Square or any opportunities, when we look at them we judge them according to two criteria: whether it fits in with our strategy and whether the return profile of the project meets our requirements,” said Wen Khai Meng, chief executive officer of CapitaLand.