Carlyle buys Shanghai office tower from Singapore’s Forterra
The Carlyle Group has paid $267 million for Central Plaza, a Shanghai office building owned by Singapore real estate fund Forterra Trust. The deal is further confirmation of private equity firms’ appetite for commercial real estate in China, coming a few months after The Blackstone Group acquired Huaming Imperial Building, also in Shanghai.
Forterra said in a regulatory filing that the price represented an 8.5% discount on the building's market value of RMB1.8 billion ($290 million). It has owned Central Plaza since June 2007 and expects to generate net cash proceeds of $127 million from the sale, which will be put towards the completion of The HQ, the company's landmark mixed-use office and retail development in Shanghai.
Central Plaza is a 19-floor grade A office tower located opposite People's Square in Puxi district. It was completed in 1998 and renovated and re-launched in 2010. It had an occupancy rate of 99.8% as of December 2012.
Carlyle has raised two Asia-focused real estate funds - the first closing in 2005 at $410 million and the second closing in 2010 at $485 million.
Blackstone, arguably the most active real estate investor in Asia among the global buyout firms, with around $2.5 billion deployed, announced last December that it would launch its debut regional property fund.
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