CapitaLand Trust said to be selling One George Street

CapitaLand Trust said to be selling One George Street

CapitaLand Commercial Trust (CCT), 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-storey One George Street building in the Raffles Place office district, the person told Bloomberg, asking not to be named as the information is private.

The building, whose tenants include the Royal Bank of Scotland and Diageo Singapore, has 41,564 sq m of lease area, according to the trust's website.

The tower, bought in 2008 for $1.17 billion(S$1.7 billion), was valued at $1 billion million as of June 30, 2015, according to the company website.

CapitaLand Commercial Trust Management, the manager of CapitaLand Commercial Trust, did not comment on its plans for One George Street.

However, in an e-mailed statement in response to a query, the company said it "adopts an active portfolio management strategy to evaluate plans for CCT's properties from time to time".

"The portfolio and asset plans include acquisition and development, as well as divestment and asset enhancement of any of its assets," the company said in the e-mail. "There is no certainty or assurance of any plans materialising", it said, but added that annoucements will be made on the Singapore Exchange listings "as and when there are material developments".

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 the city-state fell 0.1 per cent in the quarter ending Sept 30 last year 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 to 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, the company said.

The vacancy rate in the central business district increased to 6.1 per cent in the three months to Sept 30.

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.


This article was first published on January 14, 2016.
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