Singaporean Investor Sells Down Stake In £1B Portfolio, Showing Investors Still Fancy Buying Offices

Mapletree, the Singaporean investor backed by one of the Asian state’s sovereign wealth funds, has brought new investors into a European office portfolio valued at €1.2B (£1B), in a sign that investors are still keen to put significant amounts of money into office assets in spite of uncertainty over the future of the sector.

The firm said it had set up a new fund, the Mapletree Europe Income Trust, which will own a portfolio of seven office assets across the UK and Europe. The portfolio comprises 2.9M SF and includes assets in Manchester, Bristol, Aberdeen, Dublin, Warsaw, Munich and Utrecht. It is the company’s first office fund in Europe. 

Mapletree, which is backed by £55B Singaporean sovereign wealth fund Temasek, said it had raised €507M (£437M) of equity for the fund and is keeping 27% of the fund’s equity itself. It said it is targeting an internal rate of return of 12% for the fund, which will run for five years with the option to extend it for another two years. Mapletree said the equity offering is oversubscribed, highlighting investor interest.

The UK assets in the portfolio are 3 Hardman Street in Manchester, One Glass Wharf in Bristol and the IQ building in Aberdeen. It paid £365M for the assets in 2015, a 5.7% yield, in what was then its first office deal outside of Asia. In 2019 it bought the Nova Atria office campus for €167M, where some of the space is leased to Facebook. The weighted average lease length of the portfolio is 6.8 years.