Singapore-based CapitaLand Integrated Commercial Trust (CICT) has successfully sold its 21-storey office building, located at 21 Collyer Quay in Raffles Place, for $688 million. This divestment was revealed in a filing to the Singapore Exchange by CICT’s manager on November 12.
The 999-year leasehold property was acquired by an unrelated third party at a price of $3,230 per square foot, based on the building’s net lettable area of approximately 213,000 square feet. The sale price was determined through a willing-buyer-willing-seller approach and in line with an independent property valuation conducted by Savills.
The exit yield for CICT from this divestment, based on the consideration and the building’s annualised net property income for the period ending September 30, 2024, is below 3.5%. The net proceeds from the sale are estimated to be around $681.7 million.
21 Collyer Quay is strategically located in the central business district (CBD). It was previously occupied by HSBC, but in 2021, the lease was taken over by WeWork, a co-working operator. After undergoing a design and fit-out of the space, WeWork officially opened its flagship location at the building in September 2022.
In April this year, WeWork announced that it had reached a favourable agreement with its Singapore office landlords following its bankruptcy in the US in November 2023. This allows them to remain in their current buildings in Singapore for the foreseeable future. CICT’s website states that WeWork has a seven-year lease for 21 Collyer Quay, which will expire in 2028.
This divestment comes after CICT’s announcement of higher revenue and net property income for the first nine months of fiscal year 2024. This move is part of their strategy to optimize their portfolio and unlock value for their unitholders.
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