Sunday 17 December 2017

Norway sovereign wealth fund joins bidding for tower owned by Blackrock

Blackrock chief executive Larry Fink
Blackrock chief executive Larry Fink

Joyce Koh

Norway's sovereign wealth fund is among bidders for BlackRock's Asia Square Tower 1, an office building in Singapore's central business district, according to people familiar with the matter.

CapitaLand, Singapore's largest developer, and Keppel Land. have also made offers for the property, said the people, who asked not to be identified because the process is private. The office tower could be valued at more than S$3.5bn (€2.3bn), according to the people.

The agreement for Asia Square Tower 1 could be reached over the next 60 days, one of the people said. The Singapore dollar rose almost 1pc against the US dollar, the biggest gain since March 23.

BlackRock, the world's largest asset manager, is led by Larry Fink (pictured). The firm said earlier this year that it has received expressions of interest for Asia Square Tower 1 and could get more than S$4bn for the building whose tenants include Citigroup. BlackRock may also look to sell Asia Square Tower 2, Greg Lapham, a real estate managing director at the firm, said.

The two towers together are worth S$7 billion, Lapham said at the time, and the sale could be a club deal -- in which several investors bid together -- or could attract investors such as sovereign wealth or pension funds.

Thomas Sevang, a spokesman for Norway's wealth fund, declined to comment. As part of CapitaLand's normal course of business, the company evaluates and seeks accretive acquisitions, the developer said in an e-mailed response to queries. Representatives for BlackRock and Keppel did not immediately return requests for comment.

Norway's wealth fund, which is the world's biggest, gets its capital from the country's oil and gas production and its investment guidelines from the government. It is mandated to hold about 60pc in stocks, 35pc in bonds and 5pc in real estate. The wealth fund said in March it was making preparations to make its first Asian real estate investment, narrowing its search to Singapore or Tokyo.

CapitaLand owns properties including homes, shopping malls, offices and services residences. Singapore-based Keppel Land and its related companies have been active in the island state's office market over the past year or so as rents surged.

Singapore's office rents peaked in the first quarter as economic growth shows signs of tapering, according to Cushman & Wakefield. Grade-A office rents in the central business district could slide 14pc over the next two years to S$9.12 per square foot per month from S$10.60 per square foot, Cushman estimates.

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