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Marina Bay Office Tower 1 sold for $3.4b to Qatar fund

Marina Bay Office Tower 1 sold for $3.4b to Qatar fund.

Asia Square Tower 1 at Marina Bay Singapore was sold to Sovereign wealth fund, Qatar Investment Authority (QIA) at a record record $3.4b from BlackRock. The sale is the largest-ever single-tower property deal in the Asia-Pacific region and might mark a turning point for downward trend of the market.

The tower along Marina View at Marina Bay houses Google and Citigroup, is part of a two-tower development owned by BlackRock. It offers Grade A office space standing tall on ample of 1.2 million square feet land and retail space on an area of nearly 40,000 square feet.

A turnpoint for office sector

The sale come mark a positive turn point for the looming office sector in Singapore, the vacancy rates in this segment hit the highest level in almost a decade.

"Following this flagship transaction, we expect there will be increasing investor interest in Singapore prime office stock in the coming months," Greg Hyland, head of capital markets Singapore at JLL, said in a separate statement.

Said Jeremy Lake, CBRE executive director, investment properties: "We courted some of the world's largest funds and leading investors for this exercise and without exception. He added that Singapore is able to comparable to Shanghai's Liujiazui or Canary Wharf in London. Both sellers and buyers can be satisfied with all great outcomes they have achieved.

Asia Square Tower 1 is the third sovereign wealth fund that QIA hajs invested in Singapore in the last five to six years, two formers are the Raffles Hotel via unit Katara Hospitality, and partnered The Ascott to set up a US$600 million (S$815 million) last year. Besides, The Abu Dhabi Investment Authority and Malaysia's Khazanah Nasional are two distinguished funds that see Singapore as a good place to protect their capital.

BlackRock keeps a "very positive view" on Singapore.

BlackRock said the "fairly swift and orderly" sale with QIA started a few months ago. Earlier reports said other interested parties included CapitaLand, ARA Asset Management as well as Norway's sovereign wealth fund.

Foreign developers demonstrate an appetite for greater risk and they are looking for major single asset opportunities in the region such as Asia Square. It could be due to the comparative attractiveness of Singapore such as stable political outlook, superior infrastructure and strong economic fundamentals.

Last summer, CapitaLand- one of the leading reputable developer in Singapore organized some talks for the Asia Square tower's sale and then followed by the property fund management specialist- ARA Asset management.

 

Adapted from: The Straits Times, 7 June 2016