Allianz Makes First Singapore Property Move in $392 Million Deal

(Bloomberg) -- Allianz SE is making its first foray into Singapore’s property market with the purchase of a stake in an office tower in the city’s central business district.

Allianz Real Estate, the real estate investment arm of Allianz Group, will acquire a 20 percent stake in Ocean Financial Centre, a 43-story Grade-A office tower, from Keppel REIT for S$537.3 million ($392 million), the company said in a statement Friday. The deal is part of Allianz’s strategy to allocate 5 percent to 10 percent of its real estate investments to the Asia-Pacific region, it said.

“This transaction is aligned with our approach of creating a quality portfolio of core assets in 24x7 cities,” said Rushabh Desai, Asia-Pacific chief executive officer at Allianz Real Estate.

Singapore prime office rents have climbed 18 percent during the past six quarters amid a dearth of new space. Supply will only start to increase in 2020 with the scheduled completions of ASB Tower and Afro-Asia i-Mark. In 2021, CapitaSpring and the redevelopment of Hub Synergy Point should be finished, followed by IOI Properties’ development in Marina Bay in 2022, according to JLL.

Keppel REIT currently owns 99.9 percent of Ocean Financial Centre. Built in 2011 by Keppel Land, the property has a total net leasable area of 877,635 square feet, comprising an office tower with retail outlets on the ground floor and basement level. The occupancy rate was 95.5 percent as at Sept. 30.

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