Korea pension fund expected to take stake in Frasers Tower

Singapore

SOUTH Korea's National Pension Service (NPS) is expected to take a stake in Frasers Tower in Singapore's Central Business District, The Business Times understands.

Market watchers note that NPS has been doing exclusive diligence on the acquisition for some time, for a 50 per cent stake in the 38-storey, premium Grade-A specification office building on Cecil Street.

A deal could be inked soon, and when that happens, it will mark NPS' first major real estate investment in Singapore. The transaction is expected to value the entire property at just under S$2,900 psf on net lettable area (NLA), or nearly S$2 billion.

Market watchers expect the deal to be a structured and complex arrangement. The mainboard-listed Frasers Property, which developed the building, is likely to continue to manage the asset.

Completed last year, Frasers Tower has about 663,000 sq ft NLA of office space and some 22,000 sq ft NLA for retail. Designed by DP Architects, it comprises an office tower and an adjacent three-storey cascading retail podium with a roof garden. It also has a park with a restaurant in it, and a three-storey basement car park.

The Building and Construction Authority (BCA) has given the building the BCA Green Mark Platinum rating.

Anchor tenants include Microsoft and French energy giant Total; other tenants include Sumitomo Corporation, Arup, Fonterra, Pacific Life and serviced office provider The Executive Centre.

CBRE and JLL, the joint marketing leasing agents for the building, are understood to have been involved with NPS' proposed investment in the property.

It has 32 office floors starting at Level 5; all but one of these floors range from around 19,400 sq ft to 21,800 sq ft in size. The 38th floor has about 10,000 sq ft of office space. Above that is a sky garden with a view of the city.

Frasers Property had previously raised S$1.2 billion in a syndicated secured green loan for the development of the property. BT previously reported that the main contract was awarded to Hyundai Engineering & Construction Co for about S$287 million.

Frasers Property paid S$924 million or S$1,112 psf per plot ratio for the 99-year leasehold commercial site.