CapitaLand Trust to sell Asia Square Tower 2, buy Paragon in $5 billion Singapore property deals

April 20 (Reuters) - Singapore's CapitaLand Integrated Commercial Trust (CMLT.SI), opens new tab (CICT) said on Monday ‌it has agreed to sell Asia Square Tower 2, a commercial development in Marina Bay precinct, to Malaysia's IOI Properties (IOIP.KL), opens new tab for S$2.48 billion ($1.95 billion).

The trust will also acquire Paragon, a freehold ​integrated development on Orchard Road, for S$3.9 billion from Cuscaden Peak, whose ​shareholders include Singapore state investor Temasek. Both deals total roughly S$6.4 ⁠billion.

The transactions reflect how Singapore's largest commercial REIT is recycling capital from a ​leasehold office asset into a higher-yielding freehold retail, office and medical complex.

IOI Properties, meanwhile, ​will deepen its foothold in Marina Bay and expand its wholly owned and controlled Singapore investment property portfolio to about S$10 billion.

The 46-storey Asia Square Tower 2, which is a roughly 773,000-square-foot ​property housing office, hotel and retail space, completed in 2013, was valued at ​S$2.25 billion as of December 31, CICT said.

The trust estimates a gain of nearly S$199.9 million after ‌deducting ⁠divestment expenses from net proceeds, with the deal set to close in the second half of 2026.

CICT said the sale price represents a 9.9% premium to the asset's December 31, 2025 valuation and an exit yield of 3%.

IOI Properties said the ​agreed price came in ​S$50 million below ⁠a Savills valuation dated April 12, 2026. Asia Square Tower 2 held a 95.8% occupancy rate, as of March 31.

Paragon, ​which has 714,915 square feet of net lettable area and ​was fully ⁠occupied as of January 31, has an entry yield of 3.9% and is expected to lift distribution per unit by 2.1%, CICT said.

The acquisition will be funded through ⁠a combination ​of debt, a S$600 million private placement, and ​proceeds from the sale of Asia Square Tower 2.