The US-based asset manager is divesting the asset from its BlackRock Asia Property Fund III at SGD 2,689 ($1,995) per square foot, representing a net property income yield of 3.6 percent per annum.
The 46-storey grade-A office building comprises 778,719 square feet of lettable office and retail space. The asset is currently let to 36 office tenants and 24 retail tenants.
CCT plan to fund the acquisition through a SGD 700 million ($500 million) rights issue, an external bank loan of SGD 1.12 billion ($831 million) and the SGD 340.1 million ($253 million) disposition of One George Street, the Golden Shoe Car Park and Wilkie Edge in Singapore.
According to CCT, the acquisition is a move to “rejuvenate CCT’s portfolio with the addition of newer and higher yielding grade-A assets”, as well as taking advantage of a predicted uptick in grade-A office rents in Singapore.
CCT’s portfolio value now totals SGD 10.1 billion ($7.5 billion), with a net lettable area of 3.5 million square feet.
Soo Kok Leng, chairman of CCT, said: “With this acquisition, CCT is now well anchored in all the key sub-markets in Singapore’s Central Business District: Marina Bay, Raffles Place, Tanjong Pagar and City Hall; cementing its position as the largest landlord of prime office assets in Singapore.”
Lynette Leong, CEO of CCT, said: “Market statistics have shown that Singapore’s office market rents have reached a trough; hence, the acquisition will position CCT to benefit from the expected market uptick in grade-A office rents. Given our track record of successful leasing strategies, we will be able to capture further rental income upside from increasing the property’s 88.7 percent occupancy in a rising market.”