DBS Group Holdings agreed to buy a 30% stake in Singapore’s Marina Bay Financial Centre Tower 3, where the move of its headquarters was completed in October, for $1.04 billion in cash.
DBS, Southeast Asia’s biggest lender, will buy the stake from a joint venture of Hutchison Whampoa and Cheung Kong Holdings, it said in a statement today. The two companies are both controlled by Li Ka-shing, Asia’s richest man.
Expansion by banks, including Standard Chartered Plc and Barclays Plc, are driving office demand in Singapore as the city-state emerges as Asia’s center of wealth management. Singapore’s office rent may see “meaningful recovery” in the second half of 2014 after a decline this year, according to broker property Cushman & Wakefield Inc.
The transaction “could serve as a leading example showing investors are positive on the commercial property sector,” Ronald Wan, a Hong Kong-based managing director at China Merchants Securities Co., said by telephone today. “Investors will generally buy a commercial property when the price is very attractive or when they think it will be a good investment. For DBS, I think it’s the latter one.”
Winnie Cheong, a spokeswoman for Cheung Kong in Hong Kong, and Hans Leung, a spokesman for Hutchison Whampoa, didn’t immediately return calls from Bloomberg News seeking comments on the transaction. Li is 12th on the Bloomberg Billionaires Index with a net worth of US$27.9 billion ($34.1 billion).