http://www.businesstimes.com.sg/sub/...37540,00.html?

Published March 21, 2011

AIP, NTUC Income agree to buy Capital Square for $889m

They will together pay some $2,300 psf for the property

By CONRAD TAN


KEPPEL Land's property fund management arm and NTUC Income have agreed to buy Capital Square for some $889 million in the biggest office deal so far this year. Alpha Investment Partners (AIP), a wholly owned unit of Keppel Land, and NTUC Income will together pay about $2,300 per square foot (psf) for the prime office property at Church Street, they said yesterday, confirming a BT report last Friday that the transaction was imminent.

The seller, Ergo Insurance Group - a subsidiary of reinsurer Munich Re - bought the property for $505 million in 2002, Bloomberg reported.

The building was developed by Keppel Land and completed in 1998.

It has been managed by MEAG Pacific Star Asset Management, a tie-up between MEAG - the asset manager of Munich Re - and property investment company Pacific Star Group.

The property in the central business district has a net lettable area of 386,525 sq ft and comprises a 16-storey Grade A office tower with about 339,000 sq ft and two rows of conservation shophouses with around 38,000 sq ft of boutique offices and some 9,600 sq ft of shop space.

Its office tenants include news agency Bloomberg, as well as financial institutions Citibank and Morgan Stanley.

AIP will be the asset manager for the joint venture partners when the acquisition is complete.

Both AIP and NTUC Income have plans to enhance the property to maintain its competitive edge, they said.

Australia and New Zealand Banking Group Limited (ANZ) is arranging the financing of the deal.

AIP will buy its 50 per cent share of the property through its US$1.2 billion Macro Trends Fund, or AAMTF.

The fund's portfolio of properties includes the redevelopment of Katong Mall and private residential developments in Singapore's prime residential districts, as well as properties in Hong Kong, South Korea, Japan, China and India.

Following the success of AAMTF, AIP plans to launch a follow-on fund, it said yesterday.