AEW Sells 686 Jiujiang Road to Ascendas-Singbridge


686 Jiujiang Road

AEW flipped 686 Jiujiang Road after less than two years

Ascendas-Singbridge has purchased an office tower near Shanghai’s People’s Square from US real estate private equity firm AEW, as the Singaporean player seeks to expand its mainland portfolio.

The developer jointly owned by Singapore’s Temasek Holdings and JTC Corporation purchased 686 Jiujiang Road, a fourteen-storey office tower in Shanghai’s Huangpu district for an undisclosed price, and now intends to rename and upgrade the 2004-vintage grade B office building, according to a statement today by Ascendas-Singbridge.

Adding a Second Shanghai Asset to the Portfolio

The purchase of the 24,883 square metre property adds a second Shanghai project to Ascendas-Singbridge’s mainland portfolio. Best-known as a business park developer, Ascendas-Singbridge already has high tech developments in Suzhou, Hangzhou and Dalian among other mainland cities.

“China has always been a key market for Ascendas-Singbridge and we are optimistic about its prospects and economic development,” said Charles Chan, Ascendas-Singbridge’s Chief Executive Officer for China.

The Jiujiang Lu acquisition will join Ascendas Plaza on Tianyaoqiao Lu in the city’s Xujiahui area in the developer’s portfolio.

Rising Market Brings Quick Flip for AEW

David Schaefer

Head of Asia for AEW, David Schaefer

Ascendas-Singbridge’s acquisition comes in the midst of a fever for Shanghai office assets as rising tenant demand for commercial space drives up asset values in China’s commercial capital.

The value of real estate investment transactions in Shanghai rose 34 percent in 2016 compared to the previous year, according to the most recent report by property consultancy Savills. And trades of office properties accounted for 62 percent of the total commercial real estate investment transaction value in the city last year.

That rising market may have provided the opportunity for AEW, which purchased 686 Jiujiang Road (known in Chinese as 宝龙大厦or the Baolong Tower) in June 2015 from Blackstone for approximately $147.2 million, according to data from real estate information provider Real Capital Analytics.

David Schaefer, AEW’s head of Asia, commented in a statement at the time of the 2015 acquisition that, “Strong occupier demand in Shanghai going forward should continue to support occupancy and rental growth for the property.”

The investment manager purchased the property on behalf of its AEW Value Investors Asia II fund, the second value-added fund focused on Asia by the real estate investment firm. Market reports at the time indicated that AEW already had 686 Jiujiang Road on the market by September of last year.