A Qatar sovereign wealth fund recently purchased a skyscraper in Singapore for a record USD2.5 billion. The deal comes as a surprise considering Singapore’s office market continues to deal with the adverse effects of being oversupplied. Vacancies are at their highest point in 10 years.
The Qatar Investment Authority bought the 43-story Asia Square Tower 1 to add to its growing portfolio from asset manager BlackRock. The sale is the largest single-tower real estate transaction in the Asia Pacific region with a selling price of USD1,980 per sq. ft.
Experts were taken aback by the deal given Singapore’s current backlog of office supply. Vacancy rates for the city-state’s office rental sector are nearly the highest they have been in ten years. There is also another four million sq. ft. of office space set to come online this year, with another 1.4 million sq. ft. coming in 2017, according to SLP International Property Consultants, as reported by Reuters.
Asia Square Tower 1 was one of two towers owned by BlackRock in Singapore’s Asia Square development and offers more than 1.25 million sq. ft. of net lettable area. The building is reportedly almost 90 percent leased and has Citigroup as its anchor tenant.
“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 Jones Lang LaSalle, said.
This story was originally published on property-report.com and is reproduced as part of an editorial partnership between DDproperty.com and Property Report.
