CapitaLand Trust to buy Paragon in S$3.9b deal, sells Asia Square Tower 2 for S$2.5b
The acquisition of Paragon will be partially funded by the proceeds from the sale of Asia Square Tower 2.
The Paragon integrated development along Orchard Road. (Photo: Cuscaden Peak)
SINGAPORE: CapitaLand Integrated Commercial Trust (CICT) said on Monday (Apr 20) that it will acquire Paragon for S$3.9 billion from Cuscaden Peak, whose shareholders include Singapore state investor Temasek.
The trust has also agreed to sell Asia Square Tower 2, a commercial development in Marina Bay precinct, to Malaysia's IOI Properties for S$2.48 billion.
Paragon, a freehold development along Orchard Road which comprises retail, office and medical suites, has 714,915 square feet of net lettable area and was fully occupied as of Jan 31.
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.
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.
The acquisition of Paragon "strengthens the resilience and quality of CICT’s Singapore‑focused portfolio, combining sizeable, upscale retail exposure with a defensive medical component, which is supported by strong structural tailwinds such as an ageing population and rising medical tourism", said Mr Tan Choon Siang, CEO of the manager of CICT.
CICT said that the acquisition will also further consolidate its retail presence in the downtown precinct, which it noted has "limited new supply and strong long-term demand fundamentals".
"Together with ION Orchard, Plaza Singapura, The Atrium@Orchard, Raffles City Singapore and Funan, Paragon anchors CICT’s presence from Orchard Road MRT station through Somerset, Dhoby Ghaut and City Hall MRT stations.
"The consolidation will hence strengthen its portfolio quality and enable it to "capture long-term retail demand and maintain income resilience through cycles", CICT said.
