Singapore’s real estate market is contracting and the availability of office space is increasing. Real estate developers will be adding 4 million Sq. feet this year, followed by 1.4 million next year.
In what BlackRock has stated to be the single largest ever deal in real-estate in the Asia Pacific region, the world’s largest asset management company has disclosed that it has agreed to sell a 43 story office building in Singapore to Qatar based wealth fund called Qatar Investment Authority for a whopping $2.5 billion (S$3.4 billion).
The tower, aptly named Asia Square Tower 1, is located in Singapore’s financial district, and has more than 1.25 million square feet of carpet area. It has Citigroup Inc. has its anchor tenant.
“Following this flagship transaction, we expect there will be increasing investor interest in Singapore prime office stock in the coming months,” said Greg Hyland, head of capital markets Singapore.
The sale comes at a time when slowing economic growth has led to increased availability of commercial space. The vacancy in Singapore’s office property is touching their zenith in almost a decade.
According to Nicholas Mak, executive director at SLP International Property Consultants, real estate developers are all set to add four million square feet of office space in Singapore in 2016 and another 1.4 million next year.
BlackRock owned two towers at the Asian square development. After this sale, the second tower will still be in its possession.
BlackRock was advised by real estate consultant firms JLL and CBRE.
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