Tag Archives: BlackRock

BlackRock said to explore sale of second Singapore office tower

BlackRock Inc, the world’s largest asset manager, is exploring a sale of its second office tower in Singapore’s central business district, people with knowledge of the matter said.

BlackRock has started reaching out to potential buyers to gauge their interest in Asia Square Tower 2, according to the people, who asked not to be identified as the information is private. The development could fetch about S$2 billion, the people said.

Asia Square Tower 2 sits on the site next to Tower 1, which the Qatari sovereign wealth fund agreed to buy in June from BlackRock for S$3.4 billion in Singapore’s biggest office transaction.

The 46-story Tower 2, spread over 784,100 square feet (72,845 square metres), includes office space as well as a Westin hotel. The building has an occupancy rate of over 90 per cent at the end of October, according to Cushman & Wakefield Inc.

Office transactions in Singapore have been picking up this year, with CapitaLand Commercial Trust agreeing in May to buy 60 per cent of the CapitaGreen tower in the central business district for S$393 million.
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Investment company MYP Ltd the next month said it plans to offer S$560 million for the Straits Trading Building. The government is also selling prime land in the Marina Bay financial district, the first such sale in nine years.

Representatives for BlackRock didn’t immediately answer phone calls seeking comment.

Asia Square is owned by MGPA, which was acquired by BlackRock in 2013. MGPA developed the two towers on two adjoining plots it won in 2007 at government land auctions.

Qatar sovereign wealth fund to buy Asia Square Tower 1 for record S$3.4b

BlackRock has agreed to sell a 43-storey office building in Singapore to Qatar Investment Authority, a sovereign wealth fund, for S$3.4 billion, in what the US firm said was the largest-ever single-tower real estate deal in the Asia-Pacific region.

Asia Square Tower 1, located along Marina View at Marina Bay, has more than 1.25 million square feet of net lettable area and has Citigroup as its anchor tenant, BlackRock and Qatar Investment Authority said in a joint statement.

BlackRock was advised by real estate consultant firms JLL and CBRE.

“Following this flagship transaction, we expect there will be increasing investor interest in Singapore prime office stock in the coming months,” Greg Hyland, head of capital markets Singapore at JLL, said in a separate statement.

The sale comes as vacancy rates in Singapore’s office property sector are nearing their highest level in almost a decade, with the supply of commercial space set to increase amid slowing economic growth.

Developers are set to add 4 million square feet of office space in Singapore this year and another 1.4 million next year, said Nicholas Mak, executive director at SLP International Property Consultants.

BlackRock also owns a second tower in the Asia Square development.

Source : Channel NewsAsia – 6 Jun 2016

BlackRock eyes more opportunities in Singapore after Asia Square sale

FRESH from selling Asia Square Tower 1 for S$3.4 billion, or around S$2,700 per square foot (psf) on net lettable area (NLA), to Qatar Investment Authority, BlackRock says it is looking at Singapore for other potential property investment opportunities.

“We are looking predominantly at office and retail at the moment. Residential probably has a little bit further to fall because of the taxes (such as the additional buyer’s stamp duty) and the supply implications,” said John Saunders, head of Asia Pacific for BlackRock Real Estate, in an interview with The Business Times on Monday.

BlackRock, the world’s largest money manager, is keen on prime office space in the island’s central business district (CBD).

“In terms of retail, we would consider suburban as well,” Mr Saunders added. In the near term, BlackRock is more likely to buy existing office buildings or retail malls here rather than to embark on a greenfield development.

BlackRock still owns the office and retail space in Asia Square Tower 2, but there is no immediate timeline for its divestment. Tower 2′s occupancy rate is in the mid-70s per cent and BlackRock is close to a couple of big leases which when inked would take the figure close to 90 per cent. The goal would then be to finish leasing the remaining space in Tower 2 during the course of this year, after which the group could possibly look at a sale.

Tower 1, which is being sold, is already 90 per cent leased. However, Google, which reportedly occupies 130,000 sq ft in the building, will exit later this year, to move to Mapletree Business City II.

“There has been quite a lot of interest in the Google space in large part because it is one of the very few new completed buildings where someone can get contiguous multiple floors,” Mr Saunders highlighted.

Besides Singapore, BlackRock is focused on four other major markets in the region – Hong Kong, Australia, China and Japan.

Mr Saunders said: “We are quite active in four of the five. The only one we are waiting because we think it has a bit more downside is the Hong Kong market and that is a function of that you’ve got a slowing China, with the potential for rising rates in the US feeding through a peg currency.”

Property consultants noted that the Singapore office market is reeling from a glut arising from several big completions taking place within the next 12 months – Guoco Tower, Marina One, DUO Tower and 5 Shenton Way.

Cushman & Wakefield Singapore research director Christine Li said the office leasing market faces challenges in the short term due to weak business conditions, with leasing demand impacted by headwinds in the banking, oil and commodities sectors. “The supply overhang of 3.6 million sq ft will likely lead to the Grade A CBD vacancy rate exceeding double digits by the end of the year. Accordingly, Grade A CBD rents are projected to moderate by a further 10-12 per cent in 2016 (after easing 10 per cent in 2015) but stabilise in subsequent years given the significantly reduced supply pipeline in 2017 and 2018.”

Mr Saunders feels the negative press on the Singapore office market is overdone. “. . . if you’ve got a prime, CBD high-quality asset, we are still seeing good demand from both new and existing tenants. We are not really seeing a huge amount of pressure on rents”.

News of BlackRock’s sale of Asia Square Tower 1 to Qatar’s sovereign wealth fund (SWF) confirms reports in The Business Times over the past two weeks.

Asia Square Tower 1, an award-winning landmark office building, offers 43 storeys of space totalling over 1.25 million square feet of NLA. This property has received the US Green Building Council’s Leadership in Energy & Environment Core & Shell Platinum certification. Current tenants in Tower 1 include Citibank, Julius Baer and Marsh & McLennan.

This marks the largest single-tower property transaction in the Asia-Pacific to date, and the second largest single-tower property deal globally, according to data compiled by JLL.

Qatar Investment Authority was set up in 2005 to strengthen the country’s economy by diversifying into new asset classes. The group also owns the landmark Raffles Hotel here through its unit Katara Hospitality.

JLL and CBRE are joint sole advisers for this transaction for BlackRock.

Greg Hyland, head of capital markets, Singapore, at JLL said: “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.”

“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,” he added.

Market watchers highlighted that the announcement of a deal for Asia Square Tower 1 makes it the third big-ticket Singapore office transaction in the past few weeks.

The first was CapitaLand Commercial Trust’s proposed acquisition of the remaining 60 per cent of CapitaGreen. Then came Indonesian tycoon Tahir’s proposed purchase, through listed MYP Ltd, of the 28-storey Straits Trading Building on Battery Road at S$560 million; brokered by Michelle Lek of Quillion Global, the deal translates to a record price of slightly above S$3,520 psf on NLA for the 999-year-leasehold tower.

CBRE Singapore’s executive director of investment properties Jeremy Lake said: “Many investors had concluded that they should leave the Singapore office market alone and only come back next year.

“However, with three significant office investment transactions – especially the Asia Square deal, simply due to its sheer size – institutional investors such as SWFs and insurance companies from around the region and the world may reassess the market. CEOs will ask their organisations: ‘Is this a one-off transaction or are we missing something?’ The pace of leasing activity in new office developments is likely to pick up and embolden people that things are not as bad as they thought.”

BlackRock may sell Asia Square Tower 1 for over S$4b: Bloomberg

The owner of Asia Square Tower 1 may sell the building for more than S$4 billion after receiving expressions of interest from potential buyers. This is according to Bloomberg, which quoted BlackRock real estate managing director Greg Lapham in a report dated Jun 17.

BlackRock, which also owns Asia Square Tower 2, hopes to close the deal by the end of the year, Lapham said. Asia Square Tower 1, which is located in the Marina Bay area, has around 1.2 million square feet (sq ft) of office space and about 40,000 sq ft of retail space. Its tenants include Citigroup, Swiss private bank Julius Baer and Google.

The sale of tower one could be a club deal, in which several investors bid together, Lapham said. Asked to comment on the report, a BlackRock spokeswoman described Asia Square as a trophy grade-A office building in Singapore.

“The nature of this asset is that it regularly attracts attention and we continually assess the market for the best outcomes for our tenants and investors,” she said.

Source : Channel NewsAsia – 18 Jun 2015