Singapore-headquartered real estate investment manager ARA Asset Management has sold six office floors in Suntec City to a fund managed by Alpha Investment Partners, the private fund management arm of Keppel Capital, for S$160 million ($117.8 million), according to a Mingtiandi report.
The prime office floors sold to Keppel include levels 24, 25, 34, 35, and 36 of Suntec Tower 1. The said floors are leased by German chemical multinational BASF. The sixth floor is the fourth level of Suntech Tower 2, which ARA acquired in July 2016.
According to the report, ARA secured an 11 per cent capital gain on the sale as it had purchased the six floors for S$143.8 million ($105.6 million) two years ago. The floors span a combined 61,667 square foot of space and were sold for the equivalent of S$2,600 ($1,910) per square foot.
The buyer, Alpha Investment Partners, operates as the private equity real estate fund management unit of state-run Keppel Group. In January, the company exceeded its initial target by closing its third Asia-focused fund, Alpha Asia Macro Trends Fund (AAMTF) III, at $1.1 billion, including co-investments.
The company claims to have made investments worth $10 billion since its inception in 2004 across its managed funds. Including AAMTF III, Alpha currently manages six real estate and data centre funds with total AUM of $9.5 billion.
The sale comes as ARA Asset Management is raising a $1-billion infrastructure fund, its first private vehicle in the space. The Singapore-headquartered real estate investment manager had forayed into infrastructure investing recently in line with its aggressive global expansion strategy.
In January, ARA and Chelsfield Asia, a subsidiary of the international property group Chelsfield, announced that they have jointly acquired 51 Bras Basah Road, known as Manulife Centre, in Singapore in a 50:50 joint venture.
According to the 2019 Emerging Trends in Real Estate Asia Pacific report published jointly by the Urban Land Institute and PwC, Singapore ranks second in the real estate investment market in the Asia Pacific as the city-state’s office sector rebounds.
The report added that prime office rents in Singapore are expected to rise 20-25 per cent in 2018-2020 on the back of stable demand and tightening supply.