BlackRock Locks into Asia Square Talks with Capitaland


Asia Square Singapore

Asia Square 2 (left) was completed in 2013

Singapore’s CapitaLand is in exclusive talks to acquire the 1,220,000 square foot (113,350 square metre) Asia Square Tower 2 in Singapore’s Marina Bay from BlackRock Real Estate Fund III, according to sources familiar with the transaction.

The 46-storey Asia Square Tower 2 is on the block for $1,922 per square foot, according to a report from PERE and includes both 72,845 square metres (784,097 square feet) of prime office space and the five-star Westin hotel.

Negotiating a $2.34B Deal

John Saunders BlackRock

BlackRock’s head of Asia real estate John Saunders

Should the proposed deal between Singapore’s largest developer and the world’s largest asset manager be finalised at the quoted price, it would value the LEED platinum tower at $2.34 billion, with a price per square foot about 1.5 percent higher than what Asia Square 1 sold for in June last year.

A CapitaLand spokesperson contacted by Mingtiandi declined to confirm the reported discussions, but did comment that the company “maintains a disciplined approach to acquisitions and assesses opportunities based on the fit to our overall strategy and whether the return profiles meet our requirements.”

BlackRock acquired the Asia Square complex in 2013 when it bought MGPA, a Singapore-based private equity real estate firm. Just two years later, CapitaLand, partnering with Norway’s sovereign wealth fund, was in talks to buy Asia Square Tower 1, but negotiations fell through in late 2015.

In June 2016, the Qatar Investment Authority bought Asia Square Tower 1 for $2.45 billion, the largest single-tower real estate transaction in Asia Pacific last year.

Tower 2 Put on the Market Last Year

After the successful disposal of Asia Square I, BlackRock quickly began testing the market for Asia Square 2, according to a report in Bloomberg. Asia Square Tower 2’s office space was 90 percent occupied at the end of October, according to a report by Cushman & Wakefield.

With BlackRock owning Asia Square through a closed-ended fund the asset manager was reportedly motivated to test the market for its pair of trophy towers despite the overall softness of Singapore’s grade A office market. The Marina Bay financial district, where Asia Square is located, had an overall vacancy rate of 4.4 percent at the end of 2016. However, the opening of the 90,000 square metre Marina One development later this year is already luring tenants from other prime developments in the area.