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BlackRock Inc agreed to sell Singapore office building to Qatar Investment Authority fund for $3.4 billion, citing that it’s the largest single-tower real estate deal in the Asia-Pacific region, the U.S. company said.  

Based on a statement, Asia Square has more than 1.25 million square feet of net lettable area, located in the district of finance of the city state. Meanwhile, BlackRock and Qatar Investment Authority serves as Citigroup Inc’s anchor tenant.  

Two real estate consultant firms, JLL and CBRE advised BlackRock.

The head of capital markets at JLL Greg Hyland said, 'Following this flagship transaction, we expect there will be increasing investor interest in Singapore prime office stock in the coming months.'

It seemed that sales are moving as vacancy rates in Singapore’s office property sector are closely settling at session highs for a near decade, fueled by the planned increase in the commercial space supply amid sluggish economic growth.   

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According to the executive director at SLP International Property Consultants Nicholas Mak, an additional 4 million square feet are set by developers on for Singapore’s office space this year, and another 1.4 million for the next year.

The Asia Square development tower is also owned by BlackRock.

Subsequently, a fund of $2.5 billion will be paid by Qatar to BlackRock for the Singaporean tower.

The sovereign wealth fund of Qatar is buying the Asia Square Tower One of Singapore for a record of $2.45 billion from BlackRock, citing the deal to restore the city’s declining property market.

BlackRock’s Two-Tower Development

Google and Citigroup are among the houses of the tower, which is a part of BlackRock’s two-tower development since it has acquired MGPA – a property-focused fund manager of Macquarie Group.

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With the dollar amount and square footage, it seemed that it is the biggest deal in Singapore. About $1,960 per square foot is paid by the Qatar Investment Authority, and sales are top ranked worldwide for a trophy building of comparable size, including prime location.  

The Asian Prime office buildings are usually not involved in the market, but are normally held by listed development firms or real estate investment trusts.

As office rents in Singapore remained under pressure, with banks cutting back their stem demand for office space, the BlackRock deal came in.

Head of Asia Pacific for BlackRock Real Estate John Saunders mentioned that broader concerns over the looming oversupply were overstated as there was a slight building expansion occurring. 

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