CapitaLand Commercial Trust (CCT), which is "Singapore's largest office real estate investment trust by value," is now currently in works to sell their office tower in the city's central business district says a source.
According to the unidentified source (for confidentiality reasons), CapitaLand Commercial is looking to sell a 23-story building in the Raffles Place office district, the One George Street building.
The building's tenants include Royal Bank of Scotland Group Plc and Diageo Singapore PTE, who are leasing 41,564 square meters in the building. The tower was first purchased in 2008 for S$1.17 billion ($816 million), although the company's website claims it was valued at S$927 million on Dec. 31, 2014.
CapitaLand Commercial Trust Management Ltd., the manager of CCT, declined to comment on its plans for One George Street.
However, it answered questions in an email statement by saying that it "adopts an active portfolio management strategy to evaluate plans for CCT's properties from time to time," reports Bloomberg.
The rumored CapitaLand Commercial Trust sale follows BlackRock Inc.'s move to sell another prime office tower in Singapore, the Asia Square Tower 1. Once BlackRock closes that deal, the sale would be the biggest office deal in Singapore.
As it turns out, the value of office buildings within the city-state have seen a decrease of 0.1 percent in the quarter that ended in September 30, as compared to its previous three months. Meanwhile, shops also experienced a 0.3 percent drop during the same period, as reported by the Urban Redevelopment Authority.
Rents in the central business district of Singapore saw a 4.5 percent decrease during the last three months ending on Sept. 30, as compared to the previous quarter, as per Jones Lang LaSalle Inc.
Futhermore, rent in Singapore is expected to lower through the rest of the year, since 3.07 million square feet of office space will see its completion.