CapitaLand Integrated Commercial Trust (CICT), Singapore’s largest commercial real estate investment trust, has announced the divestment of Asia Square Tower 2 for S$2.5b and the acquisition of Paragon, a premier freehold integrated development on Orchard Road, for S$3.9b. The acquisition is expected to yield a 3.9% entry return and is partially funded by the capital from the strategic divestment of Asia Square Tower 2, which had an exit yield of 3.0%.
The acquisition of Paragon is anticipated to enhance CICT’s portfolio, delivering a 2.1% increase in distribution per unit (DPU). Paragon, comprising retail, office, and medical suites, is expected to bolster CICT’s position in Singapore’s commercial real estate market. The CEO of CICT’s manager, Tan Choon Siang, highlighted Paragon’s strategic location and its potential to sustain strong occupancy rates, driven by factors such as an ageing population and rising medical tourism.
The divestment of Asia Square Tower 2, sold to IOI Marina View Pte. Ltd., represents a 9.9% premium over its market valuation as of December 2025. This move allows CICT to redeploy capital into Paragon, maintaining a prudent aggregate leverage of 39.2%, well below the regulatory limit of 50%.
The acquisition, subject to unitholder approval, aims to reinforce CICT’s market leadership and enhance income resilience. The transaction is expected to be completed in the second half of 2026, with further details to be provided at an upcoming extraordinary general meeting.
