Asia Square Tower 2 sold to CCT for $2.1b

It marks the largest office deal in Singapore YTD.

Asia Square 2 has been sold to Capitaland Commercial Trust (CCT) for $2.1b.

According to Cushman & Wakefield, the deal is worth $2,689 psf for the premium of the development with a net leasable area of 779,000 sqft.

The firm added that this one of the largest deals in the country and the largest office deal in Singapore YTD.

"The transaction of Asia Square Tower 2 certainly will boost confidence for other long-term investors to venture forth and place more aggressive bids for their desired properties/land sites," Cushman & Wakefield director Christine Li said.

The transaction could lure investment demand for well-established developers, institutional investors, and sovereign wealth funds.

Here's more from Cushman & Wakefield:

Office leasing activity is expected to pick up as business sentiment continues to strengthen, with Grade A CBD rents projected to increase by up to 10% in 2018.

A two-tiered office market has emerged with new projects enjoying higher occupancy and rental recovery, while the older and less efficient office buildings are likely to come under pressure in the years ahead as they struggle to backfill the space vacated by tenants relocating to newer developments.

Nevertheless, as there will be a significant reduction in pipeline supply post-2017, the market is expected to experience stronger rental growth in subsequent years on the back of better economic prospects.

Sectors with strong growth potential such as technology, insurance, serviced office and co-working will be key to driving the recovery of the leasing market.