CapitaLand Commercial Trust has scooped this year’s biggest real-estate transaction by sale price in Singapore after it announced a deal for Marina Bay’s prime Asia Square Tower 2.

It will fork out S$2.09 billion (Bt51.4 billion) to take the 46-floor office block off the hands of private equity giant BlackRock, in a deal that signals the recovery of Singapore’s commercial property market, industry watchers said.

The sale will yield S$2,689 per sq ft (psf) for the building, which is 10 years into its 99-year lease.

The record psf price for a 99-year leasehold commercial building is $3,125 psf for 71, Robinson Road in 2008, while the 999-year leasehold Straits Trading Building last year hit a fresh high at S$3,250 psf.

Asia Square Tower 2, which has a net lettable area of 778,719 sq ft, will be partly paid for with a S$700 milฌlion rights issue and S$340.1 million from earlier divestments of Golden Shoe Car Park, Wilkie Edge and a 50 per cent stake in One George Street.

CapitaLand Commercial Trust is also counting on S$1.12 billion in bank borrowings to finance the latest acquisition, which it expects to have a net property income yield of 3.6 per cent a year. The Reit manager is banking on an uplift in Grade A office rents and found the agreed property value to be lower than comparable properties’ valuations.

Chairman Soo Kok Leng said the deal amply makes up for the recent divestments’ exit yields and is a strategic move that helps to rejuvenate the trust’s portfolio with newer and higher-yielding assets.

Tricia Song, head of research at Colliers International Singapore, said the deal is timely because commercial property prices are set to rise, thanks to a waning supply pipeline in the next two years.

JLL manages the development and advised on the transaction, with head of Asia-Pacific capital markets Stuart Crow noting that nonstrata-titled projects in the central business district will peak this year with about 2.2 million sq ft in completed buildings. “Thereafter, new supply is expected to taper down to less than 1 million sq ft in 2018, and no major office completion is expected in 2019.”

CBRE was also an agent for the sale, which executive director of capฌital markets Jeremy Lake said “provides another pricing benchmark that reconfirms that the recovery in office rents and prices is well under way”. He added: “One or two owners have been tracking this deal, pending making a decision to sell their own building.”

Colliers’ Song said other deals to watch out for over the rest of the year included Chevron House and AXA Tower, and the Beach Road GLS commercial site tender which would close on Thursday.