10.8% Suntec REIT stake acquired by Hongkong Land for S$541 million

A 10.8 per cent Suntec Real Estate Investment Trust (REIT) stake valued at S$541 million has been acquired by property group Hongkong Land from ESR.

In a press release on Mar. 19, Hongkong Land announced the acquisition "will contribute to the diversification of Hongkong Land's earnings profile".

Hongkong Land said: "This aligns with the company's positive outlook and conviction in Singapore's prime commercial property market".

"The acquisition enables Hongkong Land to deploy recently recycled capital into prime, income-producing commercial assets predominantly located in Singapore."

Suntec REIT's portfolio

Suntec REIT's portfolio comprises the eponymous Suntec City and the Suntec Singapore Convention & Exhibition Centre.

Suntec REIT's portfolio also includes other strategically located office and retail assets in Singapore's central business district, including one-third interests in Marina Bay Link Mall, One Raffles Quay, and Marina Bay Financial Centre (Towers 1 and 2).

According to the press release, Hongkong Land noted that its private real estate fund had prior interests in two of the properties.

"Both Marina Bay Financial Centre (Towers 1 and 2) and One Raffles Quay – the same assets in which the Singapore Central Private Real Estate Fund (“SCPREF”), majority owned and managed by Hongkong Land, holds a 33 1/3 interest".

Tang Organization's strategic review

Hongkong Land's acquisition follows a Mar. 17 announcement of a strategic review of Suntec REIT's portfolio by the Tang Organization, reported The Business Times.

The planned strategic review aims to strengthen portfolio performance and enhance capital efficiency.

The Tang Organization, a new sponsor of the Suntec REIT manager, is owned by investors Gordon and Celine Tang.

According to the press release, Tang Organization's wholly-owned subsidiary, Acrophyte Asset Management, announced its acquisition of the Suntec REIT manager.

Hongkong Land said Tang Organization's acquisition "creates an alignment of interest" as they now own "approximately 36% interest in Suntec REIT units, whilst also owning 100% of the Suntec REIT Manager".

Top photo from Randolfo Santos/Google Maps and MBFC/Website