CapitaLand Trust said to seek sale of One George Street office tower in Raffles Place

SINGAPORE (BLOOMBERG) – CapitaLand Commercial Trust, Singapore’s largest office real estate investment trust by value, is selling an office tower in the central business district, according to a person familiar with the transaction.

CapitaLand Commercial is seeking to sell the 23-story One George Street building in the Raffles Place office district, the person said, asking not to be named as the information is private.

The building, whose tenants include Royal Bank of Scotland Group and Diageo Singapore Pte, has 41,564 sq m (447,000 sq ft) of lease area, according to the trust’s website. The tower, bought in 2008 for $1.17 billion, was valued at $975 million as of Dec 31, 2014, the website showed.

CapitaLand Commercial Trust Management Ltd, the manager of CapitaLand Commercial Trust, did not comment on its plans for One George Street beyond saying it “adopts an active portfolio management strategy to evaluate plans for CCT’s properties from time to time”, according to an e-mailed statement in response to a query.

The proposed sale comes as another prime office tower, Asia Square Tower 1, has been put up for sale by BlackRock, in a deal that when concluded could make it the biggest office transaction in Singapore. The value of office buildings in Singapore fell 0.1 per cent in the quarter ending Sept 30 from the previous three months while shops declined 0.3 per cent, according to the Urban Redevelopment Authority.

Rents in the central business district fell 4.5 per cent in the three months ended Sept 30 from the previous quarter, according to Jones Lang LaSalle. Rents will trend lower this year as about 3.07 million sq ft of office supply will be completed, it said.

The vacancy rate in the central business district increased to 6.1 per cent in the three months to September. Vacancies are expected to rise gradually over the next few quarters as some occupiers, mainly from the financial sector, give up space, Jones Lang LaSalle said.