The Middle Eastern sovereign wealth fund Qatar Investment Authority (QIA) has agreed to acquire Asia Square Tower 1 in Singapore from the global asset manager BlackRock for approximately S$3.4 billion (€2.2 billion; $2.5 billion)
The deal marks an end to a long-drawn-out sale process of one of the largest single-asset property transactions in Asia Pacific to date.
Asia Square Tower 1 comprises more than 1.2 million square feet of Grade A office space and nearly 40,000 square feet of retail space. The tower has financial services companies Citibank and Julius Baer among its tenants. The lump sum price indicates BlackRock has sold the 43-storey office tower located in Singapore’s Marina Bay business and financial district for around S$2,720 per square foot.
The selling price appears to be much less than the original target set by BlackRock. According to a May 2014 white paper sent to investors and seen by PERE the firm was targeting to sell the asset at S$3,638 per square foot. When the asset was officially brought to the market last year the asking price was S$3,200.
However in the first quarter of this year BlackRock is understood to have lowered its asking price for Asia Square Tower 1 to between S$2,800 (€1813; $2057) and S$2,900 per square foot, in a sign that it was struggling to find a buyer, according to an earlier PERE report.
Property services firm JLL and CBRE jointly advised on the transaction.
“Asia Square is one of the most prestigious commercial developments in the region and represents a rare opportunity to acquire a premium, highly sought-after property in one of Asia’s most important business and financial centres,” said Stuart Crow, head of Asia Pacific Capital Markets at JLL, in a statement announcing the deal. “We are delighted to have worked with BlackRock and QIA on this landmark deal which, when completed, will be one of the biggest ever real estate transactions globally.”
The transaction is also pegged to be the biggest property buy by a sovereign wealth fund in Singapore. QIA has long been an active investor in the region. The state fund reportedly owns the landmark Raffles Hotel in Singapore through its hospitality unit. Last year it also formed a $600 million fund with the serviced residences subsidiary of Singapore-based developer CapitaLand to invest in serviced residences globally.