AEW Buys Singapore’s Westgate Tower For S$675mil
SINGAPORE – AEW is said to be purchasing the 20-storey Westgate Tower from Sun Venture Group for roughly S$675 million, reported The Business Times on Wednesday morning (15 June, SGT).
The selling price translates to more than S$2,200 psf based on the office building’s net saleable area of 305,000 sq ft. Notably, Westgate Tower is located close to the Jurong East MRT Station and stands on a land plot with a remaining leasehold tenure of about 88 years.
AEW’s acquisition of Westgate Tower follows the US-based property investment manager’s sale of two office properties here earlier this year – It divested 55 Market Street to Kajima Corporation for S$286.9 million or S$3,450 psf based on the asset’s net leasable area (NLA). It also offloaded Twenty Anson to KKR for S$598 million or S$2,900 psf.
The news outlet has learned that Westgate Tower has an occupancy rate of around 93 to 94 percent, with an average passing monthly rent at the high-S$6 psf level. Among the commercial property’s tenants are CPG, Pfizer, Daimler, and Great Eastern.
Westgate Tower’s S$675 million sale adds momentum to Singapore’s office investment market. Initial statistics compiled by Jones Lang LaSalle (JLL) shows that nearly S$4 billion worth of office properties here have changed hands so far this year, excluding AEW’s recent acquisition. The figure cover deals worth S$5 million and above involving assets with an office component encompassing at least 80 percent of its area.
In comparison, the figure for the whole of 2021 was S$5.15 billion, down from the S$7.6 billion recorded in 2019 before the COVID-19 pandemic.
The Business Times understands that CBRE negotiated for the Westgate Tower transaction through a private treaty. While the real estate consultancy refused to comment on the deal, its Head of capital markets and Senior Executive Director for Singapore Michael Tay shared that institutional investors are starting to take note of the development in Jurong East, including the authorities’ plans to transform the area into a major commercial hub.
“In spite of headwinds from the macroeconomic situation including high interest rates and geopolitical uncertainty, investors remain keen on Singapore office assets. This is underpinned by relatively healthy economic conditions and office market fundamentals (i.e. tight supply and diversified demand drivers including from the tech, wealth management, insurance and biomedical fields),” Tay commented on the overall Singapore office investment market.
