Chinese e-commerce giant Alibaba Group Holding Ltd., through its subsidiary Alibaba Singapore, has agreed to acquire a 50% stake in AXA Tower, a Singapore office tower, in a deal valuing the property at S$1.68b billion (US$1.2billion).
According to a statement by Perennial Real Estate Holdings (Perennial), an integrated real estate and healthcare company, headquartered and listed in Singapore, Alibaba Singapore will purchase the stake in the 50-storey landmark Grade A office tower from Perennial Shenton Investors Pte. Ltd. (PSIPL), a Perennial-led entity comprising a consortium of investors.
Upon completion of the transaction which is expected to take place around June 2020, subject to the conditions precedent being satisfied, Perennial and Alibaba Singapore will form a new joint venture with same investors, for the redevelopment of AXA Tower located in Singapore’s central business district.
AXA Tower currently has an existing gross floor area of approximately 1.05 million square feet. Based on Urban Redevelopment Authority’s Master Plan 2019, AXA Tower has already secured an approved uplift in its gross plot ratio which would increase the development’s existing GFA from approximately 1.05 million sq ft to approximately 1.24 million sq ft. Approval has also been obtained to further increase AXA Tower’s GFA to 1.55 million sq ft should it integrate hotel and residential usage under the CBD Incentive Scheme.
“The divestment of AXA Tower aligns with our capital recycling strategy to deliver a divestment gain, while retaining our involvement to create value via the redevelopment of the prime property which is strategically sited within the Greater Southern Waterfront with breathtaking sea views. Alibaba is already an anchor tenant at AXA Tower, and we are pleased to have their support in creating an iconic landmark in Singapore’s CBD,” said Pua Seck Guan, Chief Executive Officer of Perennial in a press release.