CapitaLand Investment Ltd, backed by Temasek Holdings Pte Ltd, and Malaysian developer IOI Properties Group Bhd are reportedly close to finalizing a joint venture to acquire One Raffles Place, an iconic office development in Singapore's commercial center. The property is expected to be sold for just under S$2.4 billion (approximately $1.9 billion), marking a significant transaction in the region's commercial real estate market.
One Raffles Place comprises two office towers, with 62 and 38 floors respectively, along with a retail mall. The current primary owner is OUE REIT, which controls a firm holding an 81.54% interest in the property. United Overseas Bank Ltd (UOB) holds the remaining 18.46% and occupies space within the complex. UOB is expected to retain its space even after the sale. The sellers had initially sought up to S$2.5 billion for the development, which was valued at S$2.37 billion for OUE REIT's stake at the end of 2025. The complex offers 65,309 square meters (702,980 square feet) of lettable space.
This potential deal follows a resurgence in Singapore's large-scale real estate transactions. The city-state recorded a record $10 billion in commercial real estate deals in the first half of the year, with projections indicating it could surpass the 2019 high. The market is being supported by low borrowing costs and a greater willingness from sellers to be flexible on pricing. However, challenges persist, including the substantial asking price and the need for potential capital outlay for redevelopment. Most of the complex dates back to the 1980s, with some leases expiring by the 2080s, while others extend for centuries.
IOI Properties Group has been actively expanding its presence in Singapore, with recent acquisitions including Asia Square Tower 2 for S$2.48 billion. CapitaLand Investment also has a significant presence through various REITs and private funds. The acquisition of One Raffles Place is part of a broader trend of increased investment in Singapore's office market, driven by factors like falling interest rates and rising rents.
