Keppel Land puts 50% stake in Capital Square on market

SINGAPORE — A unit of Keppel Land has put up for sale its 50 per cent stake in Capital Square, a 16-storey landmark office building in Singapore’s central business district (CBD), in a deal that analysts estimate to be worth S$500 million.

Pacific Champion Group, owned by Keppel Land’s property investment advisory arm Alpha Investment Partners, has appointed CBRE and JLL to manage the sale via expressions of interest, the real-estate brokers said yesterday. Capital Square, developed by Keppel Land, was completed in 1998. The building is currently 100 per cent occupied, reflecting the strength of the office market in Singapore and within Raffles Place.

The planned sale comes after the office market boom in Singapore in recent years, with companies in social media, technology and commodities taking up space in the CBD. Office rents in the CBD jumped 14 per cent last year, the biggest increase in the region amid limited supply, JLL said. Among investors eyeing commercial real estate in Singapore is Norway’s sovereign wealth fund, the world’s largest, as it makes final preparations for its first Asian property investment.

“Alpha would make a good return, considering office rentals are up 20 to 30 per cent since 2011 when Alpha bought the stake and capital values would have risen about 20 per cent,” said Mr Donald Han, managing director at real-estate broker Chestertons.

Alpha bought the property with insurer NTUC Income in 2011 from Munich Re for S$889 million, or nearly S$2,300 psf. Mr Han estimated that Alpha could fetch as much as S$2,800 psf, valuing the stake at more than S$500 million.

Capital Square has a total net lettable area (NLA) of 388,215 sq ft split between three distinct components. 23 Church Street is a 16-storey Grade A office building with an NLA of 340,605 sq ft. The anchor tenants are Citibank, Morgan Stanley, Bloomberg and Amazon. The typical floor plate is about 30,000 sq ft, one of the largest column-free office floor plates in Raffles Place.

21 Church Street is a standalone terrace of two- and three-storey shophouses with an NLA of 20,624 sq ft. It is used as offices and occupied by Aberdeen Asset Management.

25 Church Street is also a standalone terrace of two- and three-storey shophouses, with food and beverage outlets on the ground floor and offices on the upper floors. It is multi-tenanted and has an NLA of 26,986 sq ft. AGENCIES