SINGAPORE – CapitaLand Integrated Commercial Trust (CICT) is reshaping its portfolio by selling a major office tower in Singapore’s financial district and ploughing the proceeds into a prime Orchard Road mall, in a move that signals a shift in where it sees future growth.
The trust on April 20 said it will fully acquire Paragon, a freehold retail and medical complex along Orchard Road, from Cuscaden Peak for about $3.9 billion.
The acquisition will be partly funded by the planned $2.5 billion sale of Asia Square Tower 2, a Grade A office building in the Marina Bay financial district, to Malaysia’s IOI Properties.
Paragon, which is fully occupied and houses more than 190 retail brands, will increase CICT’s presence in Singapore’s downtown shopping belt.
Together with ION Orchard, Plaza Singapura, The Atrium@Orchard, Raffles City Singapore and Funan, Paragon will anchor CICT’s presence from Orchard Road MRT station through Somerset, Dhoby Ghaut and City Hall MRT stations, CICT said.
More importantly, the acquisition will give CICT access to Paragon’s medical component, which provides a more stable and defensive income stream, it said. Paragon’s location next to the Mount Elizabeth medical cluster is also a plus, it added.
Mr Tan Choon Siang, chief executive of CICT’s manager, said in a statement that demand for medical facilities is supported by long-term trends such as an ageing population and rising medical tourism.
Mr Tan added that the sale of Asia Square Tower 2 will allow the trust to unlock value from a mature office asset and reinvest the proceeds into a higher-yielding property.
The move is expected to increase payouts to investors by about 2.1 per cent, from 11.58 cents per share to 11.83 cents, while keeping debt at manageable levels.
Two independent valuers commissioned by CICT to value Paragon had placed the property’s value at $3.895 billion and $3.905 billion as of March 31.
The divestment of Asia Square Tower 2, meanwhile, comes at at 9.9 per cent premium to its market valuation of $2.252 billion as at Dec 31, 2025.
It is expected to be completed in the second half of 2026, subject to, among other things, the purchaser obtaining shareholders’ approval at an extraordinary general meeting.
