Lippo puts in top bid for OCBC site: sources
$730-740 psf ppr bid works out to $325-$330 million
The tender for Oversea-Chinese Banking Corporation’s freehold residential site at Kim Seng Road has closed on March 30 with a top bid of about $730-740 per square foot of potential gross floor area, sources say. In lump sum terms, the bid works out to $325-$330 million.
BT understands the top bid came from Lippo Group, controlled by Indonesia’s Riady family. In all, the tender attracted six to seven bids, and market watchers suggest OCBC’s reserve price should have been met.
Other parties understood to have taken part in the tender include City Developments, Frasers Centrepoint and United Overseas Land.
Knight Frank, which handled the tender, declined to comment.
The top bid equates to a breakeven cost of about $1,050-1,100 psf for a new condo. No development charge, or DC, is payable by the buyer.
Lippo is also said to be the front runner for OCBC’s stake in blue-chip retailer Robinson.
Lippo’s bid is said to have crossed $7 per Robinson share, and market watchers say what could be holding back an announcement is that OCBC probably wants Lippo to buy its entire Robinson stake of about 36 per cent. This would cross the 30 per cent threshold that would trigger a takeover.
‘And who would want to do a general offer at such a high price,’ said an analyst. Market watchers believe OCBC may be in talks with the Securities Industry Council to try to secure a takeover waiver for Lippo.
As for OCBC’s Kim Seng Road site, the top bid by Lippo is about 60 per cent higher than the $450 psf per plot ratio including DC achieved for the next-door Times House site sold by Singapore Press Holdings in November 2003 to Marco Polo Developments, now known as Wheelock Properties (Singapore). Wheelock is developing the site into a new condo, The Cosmopolitan.
OCBC appointed Knight Frank as marketing agent for the Kim Seng Road site back in February 2003 on the eve of the Sars crisis but did not launch the site then. The property market subsequently went into a Sars-induced tailspin. But sentiment, especially in the high-end segment, has since improved, making it opportune for the bank to finally launch the site on March 1 this year.
The 159,075 sq ft freehold site is off River Valley Road and opposite Great World City.
OCBC is expected to book a nice profit from the sale. Based on the bank’s 2005 annual report, its net book value was $59.15 million at end-December last year.
The site was independently valued at $242 million as of the same date. It is zoned for residential use with a 2.8 maximum plot ratio - the ratio of potential gross floor area to land area.
OCBC said in February this year, when it announced its decision to launch the site, that written permission has been obtained for a full-facility condominium development with 248 units, in two 29-storey blocks. The proposed sale is in line with OCBC Bank’s objective to realise gains on its non-core assets over time, so it can invest in core financial services growth opportunities.
Source : Business Times - 4 Apr 2006
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