Alibaba Buys Office Space in AXA Tower Singapore for S$1.68 Billion

Alibaba Buys Office Space in AXA Tower Singapore for S$1.68 Billion

Alibaba Group, the Chinese e-commerce tech giant, has invested in AXA Tower and buying 50% of its stakes.

The current value of the sold property stands at S$1.68 billion. This transaction will boost the confidence of a fragile Singapore commercial market that has been severely hit by the Covid-19 pandemic.

Perennial Real Estate Holdings along with a group of investors recently made a purchase agreement with Alibaba’s Singapore branch. This was revealed by Perennial through a press statement.

Situated at Central Business District’s 8 Shenton Way, AXA Tower is a 50-storey commercial building marked for Grade-A office development. The office building also comes with retail podium, said Perennial.

The Urban Redevelopment Agency has already approved to increase the existing GFA or gross floor area of 1.05 million square feet to 1.55 million square feet.

This permission has been given so that according to the CBD Incentive Scheme, this building can also be used for residential and hotel purposes.

Perennial Newco which is a recently formed part of the Perennial consortium, and Alibaba Singapore will start redeveloping the property once the deal is completed. It is expected that paperwork will be finalised soon.

The CEO of Perennial, Pua Seck Guan said that since Alibaba was already among the anchor tenants of the building, their support will now help make AXA Tower among Singapore CBD’s most iconic landmarks.

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Alibaba Investment Will Boost Investors’ Confidence in Singapore

The Covid-19 pandemic has hit the Singapore economy badly. Several businesses have already announced wage cuts and some have even relieved their employees with no-pay leaves – all because of declining revenue.

In May, the Singapore central bank made it clear that the country is likely to hit recession.

Among these dark clouds, the news of Alibaba investing in a CBD project will boost everyone’s confidence.

It will also reaffirm investors about the viability of other CBD assets, said the real estate management company JLL which has been managing the deal between Alibaba Singapore and AXA Tower, on behalf of the former.

According to JLL’s Asia Pacific head of capital markets, Ms Regina Lim, due to the uncertainty posed by the pandemic, e-commerce and technology companies have forged the way ahead providing essential goods and services to people across regions.

She added that due to the increase in demand, these companies have been able to have surplus capital which has helped them remain afloat with their numerous investment and expansion plans.

Global cities such as Singapore has obviously been an attractive investment destination, she added.

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