CapitaLand Integrated Commercial Trust JV to sell One George Street for around S$1.28B

The One George Street property in Singapore's CBD. Credit: CapitaLandThe One George Street property in Singapore's CBD. Credit: CapitaLand

CapitaLand Integrated Commercial Trust (CICT) and its joint venture partner OGS (II) Ltd. have entered a deal to sell the One George Street property in Singapore to SG OGS for S$1.28 billion, the trust said in a filing to SGX Friday.

OGS (II) Ltd., a special purpose vehicle owned by insurer FWD Group, holds 50 percent of the property, while CICT holds the remainder.

The proceeds of the sale will be split evenly between the joint venture partners, the filing said, noting the exit yield of the property is around 3.17 percent.

The price was arrived at through a bidding process conducted by an appointed property consultant, the filing said. A valuation report by Knight Frank put the open market value of One George Street at S$1.175 billion as of end-September, the filing said.

One George Street is a 23-storey Grade A office building located in the Raffles Place area of Singapore’s central business district. The property’s net profit income for the January-to-September period was S$30.4 million, CICT said, noting the occupancy rate was at 96.9 percent.

CICT estimated its net proceeds would be around S$344.8 million.

“This will provide CICT with greater financial flexibility to repay debt, to finance any capital expenditure and asset enhancement works, investments and/or to finance general corporate and working capital requirements,” the trust said.

Tony Tan, CEO of the trust’s manager, CapitaLand Integrated Commercial Trust Management, said divesting the stake was part of a portfolio reconstitution.

“While we have shared the upgrading and positioning of tenant mix plan for the retail space in Raffles City Singapore in 2022, we continue to find and evaluate compelling portfolio value-adding opportunities in Singapore and overseas developed markets. The net divestment proceeds will strengthen our financial flexibility while we wait for the appropriate opportunity at the right timing,” Tan said in a statement.

In its third quarter update, CICT said part of its strategy was to divest assets which have reached their “optimal life cycle” and redeploy the proceeds into higher-yielding properties or other opportunities.