SGHOUSING.COM 新加坡房地产网

UOB divestment sees Meritus Mandarin hotel, OUB Centre and Change Alley Aerial Plaza and Tower going to Indonesian group and Malaysian partner

LAST month, it bought venerable retailer Robinson & Co. Now, Indonesia’s Lippo Group has snapped up the Meritus Mandarin hotel, OUB Centre and Change Alley Aerial Plaza and Tower in a $1 billion deal - adding to its burgeoning collection of Singapore assets.

The sellers were the Republic’s second largest bank, United Overseas Bank (UOB), and three of its associate companies - all controlled by veteran banker Wee Cho Yaw.

These companies had controlled the properties via a collective 55 per cent stake in Overseas Union Enterprise (OUE), a listed hotel and resorts group. In an announcement yesterday, UOB said the stake had been sold to the Lippo Group.

Lippo is controlled by the Riady family, known for its majority stake in Indonesia’s largest retailer Matahari and a string of property developments in Asia.

It is entering into this deal with an equally prominent joint-venture partner:

Malaysian tycoon Anandan Krishnan is the second richest man across the Causeway, with a net worth of US$4.6 billion (S$7.2 billion), according to Forbes Asia.

The two will now have to mount a mandatory general offer for OUE shares that they do not already own, after they breached the 30 per cent limit following yesterday’s purchase.

The general offer is advised by BNP Paribas Peregrine.

The deal comes at a perfect time for Mr Wee, who needs to sell UOB’s non-core assets by July 17 to comply with local banking regulations.

Local banks are not allowed to hold more than 10 per cent of businesses that are non-financial in nature, a requirement that was spelt out by the Monetary Authority of Singapore (MAS) in 2001.

Prior to the divestment, UOB held 32.58 per cent in OUE, which is considered a non-core asset for UOB. UOB and another associate company, Overseas Union Facilities, also directly own a 16.67 per cent stake in OUB Centre, another non-core asset. This is also being sold to the Lippo-led joint venture via a separate transaction.

UOB said in a statement yesterday that the OUE stake sale translates to a price of $10.20 for every OUE share, which is a 7.94 per cent premium over OUE’s last traded share price of $9.45 on Thursday.

The offer price was arrived on a ‘willing-buyer and willing-seller’ basis, it added.

OUE came under UOB’s control after the latter bought Overseas Union Bank (OUB) in 2001. It owns several properties and hotels in China and Singapore.

Divesting it made UOB the second local bank to have had dealings with Lippo in the past six weeks.

Last month, Lippo paid $203 million for OCBC Bank’s 29.9 per cent stake in 148-year-old Robinson, making it the biggest shareholder of the retailer, which operates brands like John Little and Marks & Spencer.

Both banks made a tidy profit from the sales, with UOB recording the bigger gain of the two. UOB said it will realise a consolidated gain of $353.5 million from the OUE divestment in the second quarter of its financial year ending Dec 31, but it added: ‘The UOB board of directors has not decided on the intended use of the proceeds.’

Shareholders like Mr Denis Distant are looking forward to a bigger cash dividend payout.

‘We were expecting a dividend in specie of OUE shares before. But now since OUE has been sold off to Lippo, we expect a generous special dividend from UOB,’ he said.

Lippo deputy chairman Stephen Riady told The Business Times on Friday that the group has plans to enhance the value of the OUE assets it now controls.

It is planning to increase the retail space at Meritus Mandarin.

And some have noted that Change Alley Plaza and Tower, together with Overseas Union House, can be redeveloped into a prime waterfront commercial development.

azrin@sph.com.sg

‘We were expecting a dividend in specie of OUE shares before. But now since OUE has been sold off to Lippo, we expect a generous special dividend from UOB.’

- SHAREHOLDER DENIS DISTANT

Source : Sunday Times - 28 May 2006

$410m asking price for prime freehold site works out to $1,218 psf ppr

JUST after news broke of City Developments emerging as the highest bidder for the 169,188 sq ft Lucky Tower in Grange Road, and with some market watchers wondering how many more substantial, prime collective sale sites would be rolled out, the owners of the freehold Nassim Park have offered their 245,135 sq ft freehold site through an expression-of-interest exercise.

Marketing agent Savills Singapore says the $410 million asking price for Nassim Park, which was developed by City Developments and completed only 14 years ago, works out to $1,218 psf of potential gross floor area inclusive of an estimated $8 million development charge.

This matches the record unit land price earlier this year for Eng Lok Mansion next to Gleneagles Hospital.

While the Eng Lok site has a higher 10-storey redevelopment limit compared with just four storeys for Nassim Park, and while Eng Lok’s buyers paid top dollar with a view of redeveloping the site into upmarket medical suites, Nassim Park’s more exclusive location stands it in good stead to fetch the same price as Eng Lok, says Savills Singapore managing director Michael Ng.

In fact, he expects Nassim Park’s price to surpass Eng Lok’s. ‘Freehold sites in prime districts are always in demand, but this particular site is the creme de la creme of all the sites currently available in the market. It is the only large condo site left in Nassim Road.’

Nassim Park is zoned for residential use with a 1.4 plot ratio and four-storey height restriction. It can be redeveloped into a project of about 160 apartments ranging in size from about 1,900 sq ft to 2,200 sq ft.

Nassim Park, built in 1992, has 104 strata-titled apartments and townhouses.

If the owners obtain their asking price, they will receive at least double what their units would fetch if sold on an individual basis. CityDev does not own any units in the development.

Expressions of interest for Nassim Park close on June 21.

Source : Business Times - 26 May 2006

$385m private treaty deal works out to land price of $241 psf ppr

In a move seen as reducing the risks of undertaking a massive development, Far East Organization and Frasers Centrepoint have set up their maiden joint venture, which has bagged Waterfront View, a privatised former HUDC estate facing Bedok Reservoir, for $385 million.

The price for the private treaty deal sealed late Tuesday night before the planned tender close for the property this Friday works out to a land price of $241 psf per plot ratio inclusive of an estimated $102.2 million payment to the state for lifting title restriction to enhance the site’s plot ratio, and upgrading the site’s lease from a remaining 78 years to 99 years.

The 809,037 sq ft site can be developed into a new condominium with a whopping gross floor area of over two million sq ft - enough for a massive project with about 1,600 units.

This is the biggest residential collective sale to date in terms of number of units involved (there are 583 units in the existing development), land area as well as dollar quantum, says DTZ Debenham Tie Leung, which brokered the sale.

Far East’s and Frasers Centrepoint’s breakeven cost could be about $450 psf, say analysts. Currently, 99-year condos in the area are going for above $500 psf for units that face the reservoir and below $500 psf for those that don’t.

Depending on how Far East and Frasers Centrepoint come up with their design scheme, about 80 per cent of units in the new development may face the reservoir.

Industry watchers reckon that instead of competing with each other for Waterfront View at the tender, Far East and Frasers Centrepoint figured it made more sense to team up.

This reduces their risks in terms of exposure to such a huge development - and eliminating at least one competitor in the process. The duo are said to have made their offer, good for only a day, late Tuesday afternoon, accompanied by a $19.25 million cheque (for a 5 per cent deposit).

The collective sale agreement signed by Waterfront View’s owners give the sales committee the mandate to negotiate a private treaty deal as long as the reserve price is met. This is understood to have been $370 million.

‘The sales committee could either take the offer on the table, good for only a day - or take the risk of waiting and hoping for a higher offer at the tender that may or may not come,’ said a source.

Waterfront View’s sales committee chairman Matthew Yu said: ‘We are very happy. It’s a good price. The outcome came earlier and is better than we expected.’

DTZ’s director for investment advisory services Tang Wei Leng said: ‘Given the size of the development, there were really only a few parties who have demonstrated genuine interest. The sales committee was decisive, having considered all the options carefully. We are very happy for the owners.’

The $385 million price is above an independent valuation for the property which DTZ did not disclose. Owners controlling 82.33 per cent of share values in Waterfront View have agreed to the collective sale, which will be subject to approval from the Strata Titles Board. Owners of the existing 583 apartments and maisonettes have equal share values, which means they will each receive about $660,377 per unit, which is over 60 per cent more than what the units would fetch if sold individually today.

The site is zoned for residential use with a 2.5 plot ratio.

While the deal involves the maiden tie-up between Far East and Frasers Centrepoint, it is not the first time that the men helming the two organisations have joined hands. Far East is headed by property magnate Ng Teng Fong while Frasers Centrepoint is the property arm of listed Fraser & Neave group, which is now headed by Han Cheng Fong who, during his days as group CEO of the former DBS Land, oversaw many tie-ups with Mr Ng’s Singapore unit Far East and Hong Kong arm Sino Land.

Market watchers are wondering if the two sides will team up for other acquisitions, including the second Somerset site being offered by the state. Far East clinched the first Somerset plot, the former Glutton’s Square site, in January.

Waterfront View is the fifth site Far East has bought here this year. The five total $1.2 billion.

Source : Business Times - 25 May 2006

CityDev tipped to be top bidder for Grange Rd site

The collective sale of the freehold Lucky Tower in Grange Road closed yesterday, attracting a handful of bids, the highest of which is said to have met the asking price of $380 million.

Some industry observers tipped City Developments as the top bidder. The listed property group developed the award-winning Spring Grove condo next door and owns the Kim Lin Mansion site across the road.

Newman & Goh, the marketing agent for Lucky Tower, declined to comment but confirmed the $380 million asking price has been met.

This works out to $1,126 per square foot of potential gross floor area inclusive of an estimated development charge of $20.25 million.

BT understands that the top bid came with conditions, but the other bids are within close range of one another. In such circumstances, the bidders may be invited to adjust their offers, and it remains to be seen who eventually clinches the site.

Market sources say that Far East Organization also bid for Lucky Tower. It owns a penthouse and the mini-mart in the development and has consented to the estate’s collective sale.

Lucky Towers has a land area of 169,188 sq ft and a 2.1 plot ratio - the ratio of potential maximum gross floor area to land area. The site can be redeveloped into a new 24-storey condo with about 175 units averaging 2,000 sq ft.

The existing development has 91 units including the mini-mart. Owners controlling about 84 per cent of share values have consented to the sale.

Source : Business Times - 25 May 2006

Owners in the 583-unit Waterfront View project to each get about $660,000

OWNERS at an ex-HUDC estate in Bedok Reservoir Road hit the jackpot yesterday after the site was snapped up in Singapore’s largest-ever collective sale.

Each unit at the 99-year leasehold Waterfront View will get about $660,000 - about 65 per cent above the average price of $400,000 the owners could expect on the open market.

The sprawling 583-unit project was sold for $385 million after talks with FCL Peak, a joint venture between Frasers Centrepoint and Far East Organization. The tender was due to close tomorrow.

It is the biggest collective sale transaction in terms of number of units, size and absolute price, said Ms Tang Wei Leng, director for investment advisory services at DTZ Debenham Tie Leung (SEA), which brokered the deal.

Ms Tang said the successful deal will drive the collective sale interest of owners of other leasehold sites.

Waterfront View, with a land area of 809,037 sq ft, dwarfs Westpeak Condominium in West Coast Walk, which, at 311,829 sq ft, had been the biggest freehold collective site sold in recent years.

It is also the second former HUDC estate to be sold after Far East bought the 168-unit Amberville site in Marine Parade Road in January.

The Waterfront View deal brings the total value of collective sales of residential sites so far this year to a whopping $3.1 billion, already well up on last year’s record of $2.2 billion, according to Credo Real Estate.

There were 49 collective sale deals last year, compared with 30 so far this year. FCL Peak’s offer works out to $241 per sq ft of potential gross floor area, inclusive of an estimated differential premium of about $102.2 million to upgrade the site’s 78-year lease to 99 years.

It was above the owners’ $380 million asking price but below the $450 million they had earlier hoped to get at an expressions-of-interest exercise that closed last November.

About 82 per cent of the owners have agreed to the sale, meeting the minimum 80 per cent requirement.

The owners have come a long way since the management council first explored the idea of selling the estate en bloc. The idea was initially raised before last January’s sale of Eng Cheong Tower, which kick-started the collective sale interest in 99-year leasehold projects.

‘Then, some property consultants told us the site was too big so we thought we’ll look at an alternative, which was developing the estate ourselves,’ said the estate’s management council chairman, Mr Kevin Tan, a Waterfront View resident since 1989.

‘But most of the owners preferred to sell it en bloc so we went ahead to look for a consultant. This year, we got the 80 per cent approval in four weeks.’

FCL Peak could develop between 1,400 and 1,600 high-rise units of 1,300 to 1,500 sq ft aimed at upgraders.

Frasers Centrepoint chief executive officer Lim Ee Seng said in a statement yesterday: ‘Upgraders are core to, and will underpin the recovery of the whole Singapore property market. We intend to deliver a high quality product with full condominium facilities.’

Record deal

Some key figures about Waterfront View:

Land area: 809,037 sq ft

Number of units: 583

Selling price: $385 million

What’s being planned: Between 1,400 and 1,600 high-rise units of 1,300 to 1,500 sq ft aimed at upgraders

Source : Straits Times - 25 May 2006