Mapletree Commercial Buys Google’s HQ in Singapore

The Mapletree Commercial deal is part of a buying trend in Singapore’s booming real estate market

Mapletree Commercial Trust is buying Google’s Asia Pacific headquarters in Singapore. This acquisition is part of an S$1.55 billion ($1.14 billion) deal for four buildings in Pasir Panjang.

Furthermore, the deal brings the firm another extra 1.2 million square feet of office space to its portfolio.

Mapletree Commercial Projects

The firm completed the Mapletree Business City in 2016, It is now one of the largest Class A office spaces in Singapore. Alphabet (Google) had obtained 57% of the location for its Pan Asian Headquarters operation.

The Business City has a 94% lease rate with an average rent of S$6.15 per square foot each month.

The associated math provides a yield of about 5.16% for the new REIT owners.

Singapore REIT Deals Picking

Meanwhile, Singapore was one of the first Asian nations to embrace the use of REITs. The reason is that these assets provide the benefits of commercial real estate ownership to smaller investors.

Recently, Mapletree Investments and Mapletree Industrial Trust announced a joint deal to purchase a portfolio of 13 data centers in North America from Digital Realty for $1.37 billion. A day later, Keppel DC REIT announced plans to buy a pair of Singapore data centers worth S$585.1 million.

Then Lendlease Global Commercial REIT, part of the Australian Lendlease Group, recently debuted on the Singapore stock exchange. The stock jumped by 8.8% on the first day of trading as investors moved to lock in the projected 5.8% dividend yield.

REITs More Popular in Singapore

Meanwhile, Singapore REITs are up big over the first eight months of 2019. Inflows have totaled S$211 million ($152 million), according to Singapore Exchange Ltd.’s CEO Loh Boon Chye.

REITs currently comprise 10% of the Singapore stock market. It is, therefore, safe to assume this percentage will grow as other real estate investment firms look to list shares in the country.

Compared to other Asian cities, Singapore is more attractively priced.

In addition to the REITs, we have seen large U.S. firms like Angelo Gordon buying major real estate projects in the past few months.

The private equity firm fund manager has signed an agreement to purchase the office component of the Bugis Junction Towers complex at the fringe of Singapore’s downtown core for S$547.5 million ($394.8 million) from Keppel REIT.

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November 20, 2019

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