Gaw Capital & Allianz Bid to Acquire Duo Office Retail Space

Gaw Capital & Allianz Bid to Acquire Duo Office & Retail Space

A consortium led by Gaw Capital Partners with Allianz Real Estate, an arm of the insurance giant which include them in their bid to acquire retail and office space in Bugis Area’s Duo Project.

As per reports in the media, the negotiations are still going on for the deal. The price is expected to be shade under S$2,600 psf mark for the space that has total NLA (net lettable area) of approximately 615,000 sq ft that includes both the retail and office components.

The commercial deal could be worth as much as S$1.58 billion if they acquire the space at the price at which negotiations are going on.

The mixed development Duo has been one of the most talked about projects in Singapore.

It will also include Andaz Singapore Hotel, a 342-room property for which RB Capital has already been negotiating.

Developed by the JV M+S Pte Ltd, Duo has 60:40 share between Khazanah Nasional from Malaysia and Temasek Holdings from Singapore.

There is 91 years left in its 99-year lease tenure which started in July 2011.

Duo Tower, Duo Residences & Duo Galleria

Duo Tower, the office component of the project occupies Levels 4 to 23 in the 39-storey mixed development tower.

The NLA of office component is 560,000 sq ft with MasterCard, Chevron and Abbott Laboratories being among the major tenants.

The hotel occupies the upper levels of the tower. The other tower at Duo stands 49 storey high which includes the Duo Residences, a 660-unit development.

As per data obtained from Urban Redevelopment Authority, only three units in the residential component remained unsold as of March 31, 2019.

Duo Galleria, the retail component of the project has NLA of 55,000 sq ft spread across Basement 3 and Level 1.

Duo has been designed by famous architect Ole Scheeren and has received TOP (Temporary Occupation Permit) in several stage starting from end of 2016 to 2017 end.

It needs to be mentioned that an EOI (expression of interest) exercise had been initiated last October by M+S Pte Ltd. to find buyers for Andaz Singapore as well as for the retail and office component in the project.

M+S on its part has refused to comment about the negotiations with Gaw Capital and Allianz Real Estate.

Allianz’s property investment arm had last November picked up 20% stake in the Grade-A office tower Ocean Financial Centre for S$537.3 million which is a part of Singapore’s Central Business District.

Gaw Capital Partners, the private equity firm based out of Hong Kong which was set up by brothers Kenneth Gaw and Goodwin Gaw and they already own two other properties in close vicinity of Duo Project.

They own Selegie Road’s PoMo and Hotel G which is located in Bencoolen Street. Earlier in the month of January this year they had acquired Robinson 77 in an S$710 million deal.

Gaw Capital & Allianz Long Partnership

If Allianz Real Estate and Gaw Capital successfully acquire Duo Office & Retail Space, it would be a new chapter in their long partnership.

Back in 2017, Allianz Real Estate was a part of PoMo’s acquisition by Gaw Capital and in 2018 they had tied up to buy Sky SOHO development’s two office blocks which is part of Hongqiao District in Shanghai.

Allianz had made announcements regarding its acquisition of 50% interest in a portfolio that included core modern logistics assets spread across China in 2018.

Developed by Vailog China these assets were originally owned by a managed fund belonging to Gaw Capital.

Vailog China along with Gaw Capital Partners currently owns the remaining 50% interest in this asset and also manages it.

Savills Singapore’s market data revealed that office transactions in Singapore that are S$10 million or above in the private sector have clocked S$1.9 billion this year as of now and the figure stood at S$5.2 billion last year.

Savills’ Executive Director of Research and Consultancy, Alan Cheong said that office space continues to attract foreign investors.

He said that there is short of supply as far as investible-grade office space is concerned.

He added that several owners are sitting over their holdings expecting the price to rise further up.

He also cautioned that is has become very difficult for to write investment papers to seek property fund’s approval as the rate of capital appreciation is not encouraging without increase in rentals.

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