CapitaLand Fund Buys Shanghai Office Campus

CapitaLand Fund Buys Shanghai Office Campus For US$1.1bil

CHINA – A fund co-managed by Singapore’s CapitaLand Investment has completed the acquisition of a campus containing 10 office buildings in Shanghai from New York-based property titan Tishman Speyer for 7.6 billion yuan (US$1.1 billion), reported Private Equity Real Estate (PERE) on Thursday morning (5 January, SGT).

Situated at The Springs, a development undertaken by Tishman Speyer in Shanghai’s Yangpu District. Notably, the mega project contains almost 9.7 million sq ft of office space, residences, hotels, retail premises and cultural venues.

The campus that was acquired is known as The Springs Center. It comprises 10 office buildings that are LEED Gold certified. At present, these commercial properties are 99 percent occupied by major global companies, such as Nike, Henkel and Douyin Group.

The office campus is believed to be the last property held by the dollar-denominated Tishman Speyer China Fund. But as the opportunistic fund was approaching the end of its life after it was set up in 2008, the campus was sold to a yuan-denominated fund co-managed by CapitaLand.

Interestingly, the buyer and seller signed a memorandum of understanding for the transaction a year. Although market conditions deteriorated in the 2nd half of 2022, neither party renegotiated the price.

Tishman Speyer China’s CEO Wilson Chen revealed that despite the challenges posed by China’s COVID-19 lockdowns, The Springs Center piqued the interest of both local and international investors during the bidding exercise.

“This is because investors trusted Tishman Speyer’s property management and the quality of the asset. We successfully maintained a high occupancy for the campus during the lockdown.”

Moreover, the move marks the American company’s 2nd major deal at The Springs in the last 18 months. Last June, it divested 4 office towers while they were under construction. The buyer of the commercial property totaling 2 million sq ft was ByteDance, which plans to use it as its regional headquarters.

“Just over a decade ago, we set out to create a dynamic mixed-use community, anchored by the world’s most technologically advanced companies,” commented Tishman Speyer overall Chief Executive Rob Speyer.

“CapitaLand’s investment is a testament to the tremendous success of our vision. We are pleased to complete this transaction with them as we move forward to the final stages of development at The Springs.”

At present, the American company is building two skyscrapers housing gardens at the mid-level and at the rooftop. The structures are targeted for completion by 2023 and 2025.

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