Blackstone Group is seeking to invest in more properties in Singapore to capitalize on rising demand for office space among technology firms expanding in the city-state.
The plans come after the US private equity firm announced that it’s purchasing an eight-story building from Lucas Real Estate called the Sandcrawler for $176 million, confirming an earlier Bloomberg report.
Blackstone is seeking to make long-term investments in high-quality assets that provide strong returns, Alan Miyasaki, head of Asia real estate acquisitions, said in an interview. That would require having a strong roster of tenants, such as those in the Sandcrawler, which houses the Walt Disney Co. and the Government Technology Agency.
The move underscores the attraction of Singapore’s property assets to foreign investors as the financial hub broadens its appeal for technology firms. US giants Amazon.com and Facebook and their Chinese counterparts Alibaba Group Holding and ByteDance are among companies that are making the city-state a beachhead for Southeast Asia.
The Sandcrawler deal marks Blackstone’s first Singapore property acquisition under its “core plus” strategy, where it currently has US$3.6 billion ($4.78 billion) in assets under management in Asia. Located in the city’s largest business park, the building was inspired by the Sandcrawler fortresses in the Star Wars movies, and was used by Lucasfilm.
Technology companies are keen to take up space in low-rise buildings in business parks, and not necessarily skyscrapers in the financial district, Miyasaki said. He pointed out that Grab Holdings and Sea’s e-commerce business Shopee have offices in the area where the Sandcrawler is located.
“It used to be that the tall skyscrapers were really cool,” Miyasaki said. “If we can buy five more Sandcrawlers, we’d do that.”
More tech and content companies will expand their presence in Singapore over time, he said, citing its ability to protect intellectual property as one reason. Geopolitical tensions elsewhere also make the city a relatively attractive option.
Singapore is “the one place everybody agrees on,” Miyasaki said. “This is like the Switzerland of Asia.”
