Why Hongkong Land’s S$5.7 Billion Marina One Deal Is Taking So Long, and What a Revised Plan Could Look Like

Marina One’s commercial component has about 1.88 million sq ft of net lettable area of premium Grade A office space and 140,000 sq ft of retail space. It is part of a mixed-use project developed by M+S, a 60:40 joint venture between Malaysia’s sovereign wealth fund Khazanah Nasional and Temasek. The development sits on a 99-year leasehold site from 1 July 2011, leaving about 83 years and nine months.

Hongkong Land launched the open-end Singapore Central Private Real Estate Fund (SCPREF) on 3 February as part of its pivot towards property fund management. The fund started with S$8.2 billion of assets, including one-third stakes in Marina Bay Financial Centre Towers 1 and 2, Marina Bay Link Mall and One Raffles Quay, plus 100 per cent of One Raffles Link, and 100 per cent of Asia Square Tower 1 acquired from Qatar Investment Authority. It then bought Wheelock Place in Orchard Road for about S$1.1 billion, taking assets under management to S$9.4 billion at 30 June 2026 valuations. Buying Marina One, as widely tipped, would take it to the S$15 billion target in one move.

Marina One was marketed through an expression of interest exercise, with offers closing in the first half of the year. In late July, industry watchers said Hongkong Land had offered the highest price, but with a string of conditions. Mapletree Investments, a Temasek subsidiary that was joint project manager of the development, is the other contender, and its involvement was seen as ensuring a decent exit price for M+S. M+S reportedly planned to award the property as early as August.

The column offers several possible reasons. There may be complexities around selling shares in the special purpose vehicle that holds the commercial component. Khazanah and Temasek may have been asked to take part of their payment as SCPREF units. The main factor, it argues, is the size of the deal: above S$5 billion, it would be one of the biggest single-asset property investment deals in Singapore, excluding related-party transactions. If the property is priced at S$5.5 billion and 50 to 60 per cent is borrowed, SCPREF would still need to raise S$2.2 billion to S$2.75 billion of equity. Other founding investors include Qatar Investment Authority, APG Asset Management and an established South-east Asia sovereign wealth fund.

The column says appetite for big-ticket Singapore office assets is weaker than six months ago. Net yields of about 3 to 3.5 per cent on a triple-A CBD office asset leave a thin spread over borrowing costs, and the fixed rate on longer-tenor loans has moved up. Investment committees are finding approvals harder to get. The current tightness in the CBD office market is driven by supply constraints rather than strong demand, and it is unrealistic to expect demand to grow exponentially while AI adoption and flexible working continue. Sovereign wealth and institutional investors can find better returns in retail malls, logistics, data centres and life sciences, and may not want so much capital in one office asset or one fund.

The fund could tweak its strategy, buying a series of smaller high-quality assets in the CBD and Orchard Road district rather than one giant asset, and accept a longer route to its target size. Hongkong Land could also bring in a partner, possibly a rival, to buy Marina One. Within M+S, the column says Khazanah is probably more eager to exit, and Temasek could hold its 40 per cent stake for longer, or transfer it to Mapletree while SCPREF buys the 60 per cent. Mapletree could also press its own bid for 100 per cent, which may be lower in price but with fewer conditions, and from a Temasek group view would only require paying for Khazanah’s 60 per cent.