Mapletree Commercial Trust is planning to acquire the office and business park components of Mapletree Business City (Phase 1) from Mapletree Business City for $1.78 billion. Including acquisition-related expenses, the total acquisition cost is expected to rise to $1.86 billion.

The acquisition comprises the purchase of the strata leasehold interest of an office tower and three business park blocks with a total net lettable area of more than 1.7 million sq ft. The $1.78 billion purchase price represents a 2.6% discount to valuation.

Mapletree Business City (Phase 1) is one of the largest integrated office and business park complexes in Singapore. Since its completion in 2010, Mapletree Business City (Phase 1) has seen an occupancy rate of 99% with a weighted average lease period of 3½ years.

The acquisition is expected to contribute a net property income yield of 5.6% without any income support, which is higher than the existing portfolio’s NPI yield of 5.1%. Upon the successful completion of the acquisition, MCT’s asset size will increase to $6.1 billion from $4.3 billion now.