TE Capital Partners and LaSalle Investment Management have completed the purchase of the headquarters of Singapore-based container shipping firm Pacific International Lines (PIL) for S$323.8 million ($240 million) in a deal that took nearly two years to complete.
PIL put up the 17-story office tower on 140 Cecil Street in the Raffles Place central business district in July 2020 for sale to shore up its finances as losses deepened after the Covid-19 wreaked havoc on the global economy. As freight rates strengthened and state-linked investment firm Temasek supported the firm’s debt restructuring with a $600 million capital injection, PIL managed to repay some $1 billion in debts last year.
While several investors put in a bid for the prime CBD assets two years ago, it took longer to complete the transaction as the pandemic delayed marketing efforts, according to Shaun Poh, executive director for capital markets at Cushman & Wakefield, which brokered the deal. “Our applications to relevant authorities for alternative uses of the site and lease upgrade for part of the land plots to freehold status also took eight months to be approved,” he added.
TE Capital and LaSalle said in a joint statement that they plan to build a grade A office tower on the 1,815 square meter site, which is strategically located within walking distance of four major commuter train stations in the Raffles Place CBD. A 30-story office tower with a gross floor area of 218,434 can be built on the property based on the government’s 2019 master plan.
“We are pleased to add this strategic asset in Singapore to our assets under management vis this joint venture with LaSalle Investment Management,” TE Capital managing director Emilia Teo said in a statement. “We have seen increasing office demand in the Singapore CBD from the technology and financial services tenants and are expecting a moderate level of new supply coming into the market in the next few years.”
Founded in 2019 by members of the privately held Singapore-based real estate developer Tong Eng Group, TE Capital manages over S$2 billion worth of properties across Australia, Japan, Singapore and the U.S.