Asia Square didn't fit with strategy or meet required returns, CapitaLand implies

CAPITALAND on Wednesday implied that it had earlier bowed out of negotiations to buy Asia Square Tower 1 office building because the property did not fit with its group strategy, and its yields did not meet requirements.

At its results briefing, CapitaLand Singapore CEO Wen Khai Meng said: "Whether it's Asia Square or any (other) opportunities, when we look at them, we judge them according to two criteria: whether it fits in with our strategy, and whether the return profile of the project meets our requirements.

"For Asia Square, that's how we evaluated it like any other project. As to why the negotiation didn't proceed further, I think we are bound by confidentiality agreements."

Group chief financial officer Arthur Lang added that these two criteria are important, so much so that if the seller cannot meet them, the group will "walk".

"When we come to all these opportunities, we have to stay fairly disciplined," he said.

Last November, CapitaLand said it had ceased negotiations with the seller, BlackRock.

The office building houses tenants Citigroup and Swiss private bank Julius Baer and, according to Bloomberg, could be valued at more than S$3.5 billion - making it possibly Singapore's largest office transaction ever, if it happens, it said.

Talks with other potential buyers are said to still be in progress.