CapitaLand Commercial Trust (CCT) is selling Twenty Anson, a 20-storey office building in Tanjong Pagar, for $516 million in the largest office real estate deal so far this year.
The buyer is believed to be a foreign private equity fund.
After weighing several bids, Twenty Anson fetched a price that is 19.2 per cent above its valuation of $433 million done on Dec 31 last year, and 20 per cent more than the $430 million CCT paid in 2012.
Cushman & Wakefield (C&W), which brokered the deal, said it was the largest full office transaction to date this year, dwarfing previous title-holder MYP Plaza at $247 million.
Its executive director of capital markets, Mr Shaun Poh, said the sale “caps a robust quarter for the office investment market on the back of a rental recovery in the prime office market. Investors remain confident of Singapore’s prime office rental growth story and depleting office supply over the next three years”.
Mr Kevin Chee, CEO of CCT’s manager, said in a press statement yesterday: “The divestment of Twenty Anson is in line with CCT’s proactive strategy to reconstitute the trust’s portfolio and optimise returns for our unit holders.”
CCT’s strategy has resulted in the trust gaining a bigger presence in Singapore’s core office markets of Raffles Place and Marina Bay, while shedding assets like Twenty Anson, which lie in city-fringe locations.
Last year, CCT bought the office and retail space at Asia Square Tower 2 for $2.1 billion.
In 2016, it acquired the remaining 60 per cent interest in CapitaGreen – at the former Market Street Carpark site – that it did not already own for $393 million.
Last year, CCT sold a half-stake in One George Street, which is about 400m from Raffles Place MRT station, for $592 million, and offloaded Wilkie Edge in the Selegie area for $280 million.
Last month, CCT also acquired a 94.9 per cent stake in a prime office skyscraper in German city Frankfurt’s banking district – the Gallileo – for €356 million (S$564 million).
Mr Chee said: “We will continue to explore opportunities to enhance our portfolio as demonstrated by our ongoing development of CapitaSpring in Singapore and acquisition of Gallileo in Frankfurt, Germany.”
Upon completion of Twenty Anson’s divestment due in the third quarter of this year, CCT said that its portfolio will comprise 10 properties with a total net lettable area of 4.7 million sq ft in Singapore’s Central Business District and in Frankfurt.
The price tag for Twenty Anson, which has a balance lease tenure of 88.5 years, works out to $2,503 per sq ft of the building’s net lettable area of about 206,000 sq ft.
As of March this year, it boasts an occupancy rate of 94.3 per cent. Its top tenants are Toyota Motor Asia Pacific, BlackRock Advisors Singapore and BCD Travel Asia Pacific.
The announcement by the trust’s manager yesterday confirms a Business Times report last month that such a divestment was in the works as part of CCT’s ongoing asset portfolio reconstitution.
CCT units closed three cents, or 1.8 per cent, higher at $1.66 each yesterday.