OSLO: A consortium of Norway’s sovereign wealth fund and developer CapitaLand Ltd. was chosen as the preferred bidder for a Singapore tower being sold by BlackRock Inc., in what could become the biggest office deal in the city-state, people with knowledge of the matter said.
The bidding group will start exclusive talks with BlackRock about a purchase of Asia Square Tower 1, and could reach an agreement in the next month, according to the people. It beat ARA Asset Management Ltd., which also submitted a final bid for the building, they said, asking not to be identified as the information is private.
The 43-story tower, located in the new financial district at Marina Bay, could be valued at more than S$3.5 billion ($2.5 billion), according to the people. BlackRock, the world’s largest asset manager, said earlier this year that it had received expressions of interest for Asia Square Tower 1 and could get more than S$4 billion for the building, whose tenants include Citigroup Inc.
CapitaLand shares fell as much as 3.8 percent Tuesday, the most in more than seven weeks, and were down 3.2 percent to S$3.03 at 4:28 p.m. in Singapore. The benchmark Straits Times Index fell 1.2 percent.
Office rents in Singapore’s central business district fell in the three months through September, the first quarterly drop since 2012, according to DTZ Holdings Plc. Rents may fall as much as 7 percent this year and a further 8 percent in 2016, as demand and the economy both slow, Nai Jia Lee, regional head of research for Southeast Asia at DTZ, said earlier this month.
A deal of at least $2.5 billion would be the largest office transaction in Singapore, surpassing Keppel Land Ltd.’s 2011 sale of a controlling stake in Ocean Financial Centre, according to data from New York-based research firm Real Capital Analytics Inc.