This follows the sale of the office and retail complex at Penang Road near the Orchard Road shopping belt for S$411.8 million, Suntec Real Estate Investment Trust (Suntec REIT) says.
SINGAPORE: Park Mall will be redeveloped into a commercial development comprising two office blocks with an ancillary retail component, the building’s owner said on Monday (Jun 29).
This follows the sale of the office and retail complex at Penang Road near the Orchard Road shopping belt for S$411.8 million, Suntec Real Estate Investment Trust (Suntec REIT) said in a statement.
The new buyer is a joint venture company, Park Mall Investment, in which Suntec REIT has a 30 per cent stake. The other shareholders are Phoenix 99, a wholly-owned subsidiary of property firm SingHaiyi, and Haiyi Holdings, a firm linked to Mr Gordon Tang and Mdm Chen Huaidan. They will each hold a 35 per cent interest in the joint venture.
The joint venture partners have committed to provide up to S$384 million capital funding for the acquisition and redevelopment, based on the parties’ proportionate share, said SingHaiyi.
Under the joint venture agreement, Phoenix 99 and Haiyi will have the right to acquire one office block and a right of first refusal to acquire the retail podium of the redeveloped site, said SingHaiyi. Suntec will have the right to acquire the other office block.
Park Mall, which has a large number of lifestyle and home furnishing shops, is more than 40 years old. It has a remaining land lease tenure of 53 years. Suntec REIT acquired Park Mall in 2005 for S$245.1 million.
Mr Yeo See Kiat, chief executive officer of Suntec REIT’s management company, said the divestment will allow Suntec REIT to free up capital for other investments and provide greater financial flexibility.
“The redevelopment will unlock the underlying value of the property by further enhancing the gross floor area of the site. In addition, Suntec REIT will have the ability to own part of the redeveloped property by acquiring one office block upon completion,” he added
Sources: channelnewasia, JUN 29, 2015