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Temasek-Khazanah JV confirms S$1.58 billion Duo sale

THE national joint venture between Malaysia and Singapore is divesting part of a signature mixed-use project in the republic’s Ophir-Rochor precinct, as reported by The Business Times’ Kalpana Rashiwala in May.

M+S Pte Ltd will sell the office and retail areas of the Duo complex for S$1.575 billion, or S$2,570 per square foot of net lettable area, it said in a statement on Monday night.

The sale - to Allianz Real Estate and Hong Kong private equity firm Gaw Capital Partners - comprises Duo Tower, an office block with 570,000 sq ft of prime Grade-A commercial space, and Duo Galleria, with 56,000 sq ft of retail space.

But Andaz Singapore - a Hyatt-branded luxury hotel that occupies the top 15 floors of Duo Tower - will remain in M+S’s hands. The Duo development, which sits on land with a 99-year lease, also includes 660 apartments.

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M+S is 60 per cent-owned by Malaysian sovereign wealth fund Khazanah Nasional, with the remaining stake held by Singapore national investment firm Temasek Holdings. The developer also continues to own the mixed-use Marina One in Marina Bay.

The ground was laid for Duo and Marina One in a landmark 2010 land-swop deal that saw Malaysia hand over former Malayan Railway land parcels in Tanjong Pagar, Kranji, Woodlands and Bukit Timah, in exchange for the Ophir-Rochor and Marina South sites.

Kemmy Tan, chief executive of M+S, said in a statement: “With the office and retail assets performing well beyond expectations, we are delighted that the proposed transaction of S$1.575 billion, at a record price for this area, has presented the opportunity to maximise returns for our shareholders.”

The firm still sees “tremendous growth opportunity” for Duo’s hotel component, and will continue to own and manage Andaz and Marina One “to the optimal level for our shareholders”, she added.

Meanwhile, Gaw Capital Partners president and managing principal Kenneth Gaw called the Duo deal “an important milestone for Gaw Capital in the Singapore real estate market”.

“After our acquisition of the 77, Robinson Road building in January, this deal marks our second major office transaction in Singapore in 2019 and signifies our continued optimism towards the office market here,” he said.

Gaw Capital Partners, which focuses on real estate private equity, paid a CLSA Real Estate fund nearly S$710 million for the Robinson Road office block.

The firm’s other investments in the Bugis district - near Duo - are Hotel G in Middle Road, and the office and retail development PoMo in Selegie Road, which it bought with Allianz in 2017.