Tishman Speyer sells China offices to CapitaLand for $1.1bn

Having signed an MOU a year ago, the firm has finally completed the sale to a yuan-denominated fund co-managed by CapitaLand.

New York-headquartered real estate giant Tishman Speyer has sold a 10-building office campus in China to Singapore’s CapitaLand Investment for 7.6 billion yuan ($1.1 billion; €1.04 billion), PERE can reveal.

The Springs Center is understood to be the last asset contained in the firm’s dollar-denominated Tishman Speyer China Fund, which was launched in 2008. With the opportunistic fund approaching the end of its life, the asset was sold to a yuan-denominated fund co-managed by CapitaLand.

Despite the transaction occurring during a heightened period of market uncertainty, the counterparties are not thought to have renegotiated on price from when they signed a memorandum of understanding about 12 months ago.

The campus is located at The Springs, a Tishman Speyer development in Shanghai’s Yangpu District, which encompasses nearly 9.7 million square feet of creative offices, new residences, hotels, restaurants, retail and entertainment and cultural venues. The 10 buildings in the campus are LEED Gold certified and currently 99 percent leased to leading multinational companies including Nike, Henkel and Douyin Group.

Wilson Chen, chief executive officer for Tishman Speyer China, told PERE the campus attracted interest from both international and domestic investors during the bidding process, despite the challenges posed by geographical issues and the covid-19 lockdown.

“This is because investors trusted Tishman Speyer’s property management and the quality of the asset. We successfully maintained a high occupancy for the campus during the lockdown,” he said.

This sale is Tishman Speyer’s second major transaction at The Springs over the past 18 months.  In June 2021, it sold four office buildings mid-development, totaling 2 million square feet, to TikTok’s parent company ByteDance for its regional headquarters campus.

“Just over a decade ago, we set out to create a dynamic mixed-use community, anchored by the world’s most technologically advanced companies,” Tishman Speyer chief executive Rob Speyer said in a release. “CapitaLand’s investment is a testament to the tremendous success of our vision. We are pleased to complete this transaction with them as we move forward to the final stages of development at The Springs.”

Speyer described China as “anchor of its global business” in a previous interview with PERE and it is understood that vision has not changed – despite the Chinese government’s troubles grappling with the spread of coronavirus and the political fallout since, which has led to many international firms reducing or stopping investment activity in the country.

Since Tishman Speyer entered the country in 2006, it has raised one dollar-denominated fund and 11 yuan-denominated funds. With more than 160 people and four offices in the country, the firm plans to continue launching onshore and offshore-denominated vehicles, as well as participating in development projects.

Currently, it is constructing a pair of skyscrapers featuring mid-tower hanging gardens and rooftop gardens at The Springs. The towers are expected to be completed in 2023 and 2025, respectively.