Foreign Property News | Posted by Zarni Kyaw
Singapore’s GIC is spending RMB 8 billion ($1.15 billion) to ramp up its Beijing office portfolio by making the Chinese capital’s biggest office acquisition since early last year.
The sovereign wealth fund said in an announcement that it has acquired the LG Twin Towers in the Chinese capital’s Guomao central business district after LG put the property up for sale in August of last year.
A source close to the transaction told Mingtiandi that the parties had exchanged contracts today on the South Korean electronics group’s disposal of its mainland headquarters, with the transaction due to complete next month.
With China’s property investment market slowed by tighter lending policies, concerns over the trade war with the United States and now, the burgeoning COVID-19 epidemic, GIC’s acquisition is China’s biggest investment in office assets since TikTok-maker Bytedance bought Beijing’s Zhongkun Plaza for RMB 9 billion in February last year.
Renewing Commitment to China
“GIC has been investing in China for more than two decades,” said Lee Kok Sun, GIC Real Estate’s chief investment officer. “China remains a key focus for us, and this investment reflects our continued commitment to identifying attractive opportunities in this market.”
Based on the complex’ total gross floor area of 140,680 square metres (1.5 million square feet), GIC is paying RMB 56,867 per square metre for the 15 year-old office asset, which was developed by LG Group at a cost of $400 million, according to news agency Yonhap.
Located on the Jianguomenwai Avenue strip of Chang’an Avenue inside Beijing’s third ring road, the complex includes a 40,816 square metre retail podium and 79,141 square metres of grade A office space in twin towers which rise 140 metres above the Chinese capital.
“We expect this landmark development to benefit from the strong demand for offices in central Beijing and generate resilient returns over the long term,” said Lee.
When LG engaged Savills to market the property in August 2019, the office occupancy was at 95 percent with under 20 percent occupied by LG Group.
Average rents in what locals often call the Lipstick Towers stood at RMB 320 per square metre per month in the third quarter of 2019, according to data supplied by Cushman & Wakefield.
Ref: Property Report
