One George Street’s Buyers Named As Nuveen & JP Morgan
SINGAPORE – Following a report that One George Street is being divested for S$1.28 billion to SG OGS, a private limited company, a source has revealed that the buyer is a joint venture comprising Nuveen Real Estate and JP Morgan Asset Management, reported Mingtiandi on Monday evening (15 November, SGT).
The sellers are CapitaLand Integrated Commercial Trust (CICT) and insurance firm FWD Group, which each hold a 50 percent interest in the 23-storey office building located in Raffles Place within Singapore’s central business district (CBD).
One George Street comes with a net leasable area (NLA) of 445,735 sq ft, meaning the selling price works out to S$2,875 psf. Based on the consideration and annualised year-to-date net property income (NPI), the exit yield translates to 3.17 percent.
“Divesting CICT’s 50 percent stake in One George Street is the start of our portfolio reconstitution journey which will take time to execute,” said Tony Tan, Chief Executive of CICT’s manager.
“While we have shared the upgrading and positioning of the tenant mix plan for the retail space in Raffles City Singapore in 2022, we continue to find and evaluate compelling portfolio value-adding opportunities in Singapore and overseas developed markets,” he added.
The vintage 2004 commercial property was originally built by CapitaLand and German insurer ERGO. They divested the asset in 2008 for S$1.17 billion to CapitaLand Commercial Trust, which merged last year with CapitaLand Mall Trust to become CICT.
Meanwhile, FWD Group acquired its 50 percent stake in One George Street from CapitaLand Commercial Trust for S$591.6 million in 2017. Earlier this year, The Business Times reported that FWD was tipped to relocate there but never did so.
At present, the office building is leased to Royal Bank of Scotland, Lloyds of London, ERGO, distiller Diageo, plastics maker Borouge, and Fitness First. Another tenant is Canada’s embassy in Singapore.
The sale comes as average rents of Grade A office space in Singapore’s CBD rebounded in Q3 2021, edging up by 0.5 on a quarterly basis to of S$9.64 ($7.12) psf per month, based on the latest data from Cushman & Wakefield (C&W).
In Raffles Place, office rents marginally rose by 0.3 percent to S$9.57 per month. While the vacancy level stands at 8.8 percent, no new office space is planned or under construction in the vicinity.
“While CBD Grade A vacancy rates continued to climb to 5.8 percent in Q3 2021, we expect these rates to narrow going forward. A substantial amount of Grade A vacant spaces are currently under negotiation and are likely to be snapped up over the next few months,” added C&W.