Qatar Investment Authority, Doha, reached an agreement to acquire an office tower in Singapore — Asia Square Tower 1 — from a real estate fund managed by BlackRock for roughly S$3.4 billion ($2.5 billion).
John Saunders, managing director and the Hong Kong-based head of Asia-Pacific for BlackRock's real estate business, said the deal should prove to be the largest single-tower real estate transaction ever for Asia, as well as the largest anywhere in the world since the global financial crisis.
A ranking of top real estate transactions provided by real estate consultancy Jones Lang LaSalle, which advised BlackRock, pegs the $2.5 billion price tag for Asia Square Tower 1 as second only to the June 2008 sale of the General Motors Building for $2.8 billion.
In a telephone interview, Mr. Saunders called the deal “a strong statement” about Singapore's attractiveness as a “highly transparent” financial center.
Two other purchases of Asia-based properties are currently included in JLL's top-10 ranking — both for office towers in Tokyo.
With the Asia Square Tower I deal's completion, there will still be only two Asia-based transactions in that group, as the October 2014 purchase of Pacific Century Place Marunouchi by $300 billion Singapore sovereign wealth fund GIC from an arm of Hong Kong-based alternatives firm PAG for $1.7 billion falls to 11th place on JLL's list.
A Hong Kong-based spokeswoman for Qatar Investment Authority and BlackRock's Mr. Saunders separately declined to say when the deal is expected to close.
Qatar Investment Authority has an estimated $256 billion in assets.
With asset owners around the world grappling with both the prospect of interest rates being “lower for longer” and the specter of inflation “in the background,” Mr. Saunders predicted interest in real estate globally should remain strong.
Asia Square — Tower 1 and Tower 2 — was developed by MGPA, a real estate firm acquired by BlackRock in 2013, “from the ground up,” Mr. Saunders said in a joint news release by Qatar Investment Authority and BlackRock. In the interview, Mr. Saunders declined to say how the proposed sale price compares to the cost of the project's development.
