CICT sells Asia Square Tower 2 to IOI for S$2.5b, buys Paragon for S$3.9b
Acquisition to be funded by sale and S$600 million private placement at S$2.292 to S$2.332 per unit
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[SINGAPORE] CapitaLand Integrated Commercial Trust (CICT) has sold its 100 per cent interest in Asia Square Tower 2 (AST2) to Malaysia-listed IOI group for nearly S$2.48 billion.
CICT’s manager noted that the property “has reached a mature phase in its property cycle, marking an opportune time to monetise the asset and crystallise value for unitholders”.
The Singapore Reit also announced on Monday (Apr 20) that it is buying the iconic Paragon mall for S$3.9 billion from Cuscaden Peak, to be funded with funds from the AST2 divestment.
The acquisition is expected to enhance CICT’s portfolio while “further reinforcing its market leadership as the largest owner of private commercial real estate in Singapore”.
The buy is also expected to be distribution-accretive by 2.1 per cent.
Tan Choon Siang, CEO of the manager of CICT, said: “Paragon is a rare, premier freehold integrated development in the heart of Orchard Road.”
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“In addition, the timely divestment of AST2 at an exit yield of 3 per cent enabled us to unlock value from a leasehold office asset and redeploy capital into a freehold integrated development,” he added.
The AST2 sale represents a 9.9 per cent premium over the property’s market valuation of around S$2.25 billion as at Dec 31, 2025, CICT said.
The divestment is structured through a put and call option agreement between the trustee of CapitaLand Commercial Trust and the buyer, IOI Marina View, a subsidiary of the Bursa Malaysia-listed IOI Properties Group.
CICT, through the then-CapitaLand Commercial Trust, bought the property from BlackRock in 2017 for $2.09 billion. CapitaLand Commercial Trust was merged with CapitaLand Mall Trust and renamed CICT in November 2020.
The divestment is expected to generate net proceeds of about S$2.45 billion after accounting for divestment-related expenses, yielding a net gain of roughly S$199.9 million.
A separate release from IOI Properties on Monday noted that the building is directly linked to IOI Central Boulevard Towers via an elevated pedestrian bridge, “enhancing interconnectivity across the precinct and enabling greater integration within the group’s existing investment assets portfolio.”
Strategic acquisition of Paragon
The Paragon mall, which includes retail, office, and medical suites, is being acquired from a group of vendors comprising Cuscaden Peak, Cuscaden Peak Two, Times Properties, and Paragon Trust Management. These vendors are all indirect wholly owned subsidiaries of Temasek Holdings.
The buy marks a net yield of about 3.9 per cent.
Tan noted that the acquisition “strengthens the resilience and quality of CICT’s Singapore‑focused portfolio, combining sizeable, upscale retail exposure with a defensive medical component, which is supported by strong structural tailwinds such as an ageing population and rising medical tourism.”
The S$3.9 billion total acquisition outlay for Paragon will be funded through a combination of debt, the net proceeds from the AST2 divestment, and a private placement, which was also launched on Monday.
The private placement aims to raise at least S$600 million. New units are being offered to institutional and accredited investors at an issue price range between S$2.292 and S$2.332 per unit.
This range represents a discount of about 2.7 per cent to 4.3 per cent to the volume weighted average price of S$2.3955 on Apr 17.
Financial impact
Had the acquisition and divestment been completed on Dec 31, 2025, CICT’s aggregate leverage would have been 39.2 per cent.
For the AST2 divestment specifically, assuming the proceeds were used only to repay debt at the start of 2025, the pro forma distribution per unit for that year would have adjusted slightly from S$0.1158 to S$0.1149.
Completion of the AST2 sale is anticipated in the second half of 2026, while the Paragon acquisition is expected to conclude in the third quarter of 2026, subject to unitholder approval at an extraordinary general meeting.
Shares of CICT ended flat at S$2.39 on Friday. CICT requested a trading halt on Monday morning pending these announcements.
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