KUALA LUMPUR: Property developer M+S Pte Ltd (M+S), 60:40 owned by Khazanah Nasional Bhd and Temasek Holdings Private Ltd respectively, has agreed to sell its wholly-owned Ophir-Rochor Commercial Pte Ltd (ORC) and real estate private equity firm Gaw Capital Partners to Allianz Real Estate for S$1.575 billion.
ORC is the developer and owner of Duo Tower and Duo Galleria, while Capitaland Ltd and UEM Sunrise Bhd's subsidiary UEM Land Holdings are project managers.
The offer was received through an expression-of-interest process conducted by property consultant JLL.
The office and retail portion of Duo, a mixed-use development, also includes Duo Residences and the Andaz Singapore hotel.
M+S chief executive officer Kemmy Tan said with the office and retail assets performing well beyond expectations, the proposed S$1.575 billion at a record price for this area had presented the opportunity to maximise returns to its shareholders.
"As we continue to own the hotel Andaz Singapore, we look forward to working alongside the powerful combination of Allianz Real Estate and Gaw Capital Partners, who have impressive global track records in real estate management and development, to further reinforce Duo as an attractive place for global business and travelers.
"We continue to see tremendous growth opportunity for our Andaz Singapore, especially as Bugis continues its transformation journey as a vibrant, eclectic, and complementary leisure and business district to the existing CBD. M+S will continue to own and manage Andaz Singapore and the Marina One assets to the optimal level for our shareholders," Tan said in a statement.
The Duo development is situated in the Ophir-Rochor corridor in Singapore, next to the heritage district Kampong Glam, and was designed by acclaimed architect Ole Scheeren.
Duo Tower consists of 20 floors of prime Grade-A office space occupied by prestigious MNCs and leading local companies, while Duo Galleria is a retail mall that connects directly to Bugis MRT station, an interchange for the Downtown line and East West line.
The proposed transaction does not include Andaz Singapore, the five-star luxury lifestyle hotel by Hyatt that occupies the top 15 floors of Duo Tower.
M+S continues to own Andaz Singapore as well as Marina One, the newest and largest integrated mixed-use development in the heart of Marina Bay.
Gaw Capital Partners president and managing principal Kenneth Gaw said the transaction with Allianz Real Estate marked a great step forward in its partnership with the group.
He added that DUO had enormous potential given its good location and connectivity and marks 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.
"We are very excited about the opportunity to acquire this well managed and iconic commercial asset. M+S has done a fantastic job developing the DUO office and hotel complex and has successfully leased the building to a full roster of world class tenants.
He said as M+S continued to hold the hotel portion of the complex, Gaw Capital Partners would enhance the asset and ride on the continued growth of the Bugis area as a new leisure and business district.
Allianz Real Estate Asia-Pacific chief executive officer Rushabh Desai said Duo provides live-work-play environment and is poised to establish itself as one of Singapore's major business hubs.
"It will be an excellent addition to our global 24x7 cities office portfolio” he said.