SINGAPORE

Deal Lens #1 – Warburg’s Partial Sale: A Quiet Win in Singapore’s Industrial Core

October 12, 2025

Warburg Pincus and Lendlease’s joint venture, Vita Partners, is selling three fully-leased industrial properties in Singapore to CapitaLand Ascendas REIT (CLAR) for SGD565.8m (≈USD 438m). Closed at an initial yield of ~5.7%, the deal gives Warburg a swift partial exit from the SGD1.6 billion platform it built only a year ago and reinforces Singapore’s position as the region’s most liquid industrial real-estate market. The assets that were part of the sale include 2 Pioneer Sector 1 (Tuas Connection), 11 Kallang Sector (Qualcomm Building), and 31 International Business Park.

When Vita launched in 2024, it assembled a portfolio of business-park and industrial assets across Tuas, Kallang, Science Park and Changi at yields near 6.0-6.3%. Since then, occupancy has risen to 100% and average lease term to ~5.5 years. Selling part of the portfolio to CLAR at a tighter yield implies 30-60 basis points of cap-rate compression and a meaningful uplift in value despite higher borrowing costs.

The buyer choice is strategic. Singapore REITs, constrained by gearing limits but hungry for long-WALE income, remain the natural exit route for private-equity owners of stabilised assets. For CLAR, the purchase adds exposure to mission-critical industrial facilities serving technology and life-science tenants—sectors that have outperformed office and retail.

Assuming entry at a 6.2% yield, exit at 5.7%, and ~3% annual rent growth, the trade represents a clean, low-volatility returns achieved through occupancy improvement and modest yield shift rather than financial engineering.

For Warburg Pincus, the sale reflects capital recycling more than withdrawal: proceeds can be redeployed into Vita’s pipeline of life-science and R&D developments offering higher risk-adjusted returns. For the market, the message is clear – core-plus strategies in Singapore’s industrial sector still work. Tight supply, strong tenant demand, and an active REIT ecosystem continue to underpin valuations even as global capital grows cautious.

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