Gillman Heights en-bloc sale to move ahead following court’s ruling

Gillman Heights en-bloc sale to move ahead following court’s ruling

 

SINGAPORE : After three months of deliberation, Justice Choo Han Teck has delivered a 31-page judgment that – for now – signals the end of the Gillman Heights en-bloc saga.

 

However, it was not the outcome hoped for by the 22 minority owners seeking to scupper the S$548 million deal.

 

The judge said the specific issue was not one concerning protection for the minority, but “whether a privatised HUDC estate can participate in the benefits of an en-bloc sale if the requisite conditions are met”.

 

Under current laws, a 90 per cent approval is required for estates less than 10 years old and 80 per cent for those older.

 

Some 87.5 per cent of the 608 unit owners had agreed to the sale of Gillman Heights, built in 1984.

 

On the issue of the estate’s age, which the plaintiffs claimed was less than 10 years old since the condo only underwent privatisation in 1995 and acquired the Temporary Occupation Permits or Certificates of Strata Completion (CSC) in 2002, the judge ruled that the estate was more than 10 years old.

 

He said that there was also no bad faith and breach of natural justice due to the involvement of the National University of Singapore (NUS), which held 46.86 per cent share at the development.

 

Five months after the en-bloc sale was inked in February last year, it emerged that NUS was also a shareholder of Gillman Heights’ purchaser Ankerite Pte Ltd.

 

While some owners claimed this was a conflict of interest, Justice Choo said NUS was entitled to exercise its right as a consenting subsidiary proprietor (CSP) to vote for the collective sale.

 

He added: “The minority CSPs were duly noted of the NUS vote and execution of the collective sale agreement about six weeks before the application for approval was submitted to the Strata Titles Board.”

 

Futhermore, Gillman Heights was sold before property prices skyrocketed last year, so “it would not be appropriate for the Board or this court to assess good faith with regard to the sale price of the development through the lens of hindsight”.

 

Despite the setback, one minority owner – who declined to be named – said he is not giving up the fight.

 

“Many of us are still disappointed by the conflict of interest and we will stick it out till the end and take this case to the Court of Appeals.”

 

But Lee & Lee senior partner Quek Mong Hua, who represented the majority owners, said: “They have every right to appeal, but they have to consider if it is in their interest bearing in mind the cost.”

 

For now, Mr Quek said his clients were happy the judgement is out and they are hoping to complete the sale. – TODAY

 

Source: Channel NewsAsia

CapitaLand buys 62% of M’sian mall for US$183m

CapitaLand buys 62% of M’sian mall for US$183m

 

SINGAPORE – Southeast Asia’s largest property developer CapitaLand said on Wednesday it had paid $250 million (US$183 million) for 62 per cent of a retail mall in Malaysia.

 

CapitaLand chief executive Pua Seck Guan said the latest acquisition puts the Singapore-listed firm on track to set up its Malaysian retail real estate investment trust (Reit) by end of this year.

 

‘Together with the earlier acquisitions of Gurney Plaza and Mines Shopping Fair, the three assets collectively amount to a total asset size of approximately $840 million,’ Mr Pua said in a statement.

 

The retail space in the Sungei Wang Plaza mall is located in the popular Bukit Bintang retail belt in the Malaysian capital of Kuala Lumpur and includes parking lots.

 

The mall has close to 100 per cent occupancy and sees more than 24 million visitors annually. — REUTERS

 

Source: Business Times

CapitaLand acquires 62% of KL’s Sungei Wang Plaza for S$250m

CapitaLand acquires 62% of KL’s Sungei Wang Plaza for S$250m

 

SINGAPORE : Property developer CapitaLand has acquired about 62 per cent of Sungei Wang Plaza, one of the most established retail malls in Kuala Lumpur.

 

It paid about S$250 million for the purchase, which includes retail space and parking lots.

 

Sungei Wang is a prime freehold property along the main Bukit Bintang shopping precinct in the Malaysian capital.

 

The mall has close to 100 per cent occupancy and sees more than 24 million visitors annually.

 

CapitaLand said the acquisition will form the third seed asset for its proposed pure-play Malaysian retail real estate investment trust (REIT).

 

Its earlier acquisitions are the Gurney Plaza in Penang and Mines Shopping Fair in Selangor.

 

The three properties will have a combined asset size of about S$840 million.

 

CapitaLand said this will put it firmly on track to create its proposed pure-play Malaysian retail REIT by the end of this year. – CNA/ms

 

Source: Channel NewsAsia

CapitaLand buys stake in popular KL shopping mall

CapitaLand buys stake in popular KL shopping mall

 

CapitaLand announced today that it has acquired close to 62 percent of the total retail strata area in KL’s Sungei Wang Plaza.

 

It bought the property at a price of some 250 million dollars through an asset securitisation structure.

 

Sungei Wang, a popular shopping mall among tourists, is situated in KL’s Golden Triangle.

 

Under the asset securitisation structure, Sungei Wang is held by a special purpose vehicle, Vast Winners.

 

CEO of CapitaLand Retail Pua Seck Guan said that there are tenancy remixing opportunities to create significant value at Sungei Wang.

 

He added that together with the earlier acquisitions, CapitaLand has a total asset size of some 840 million dollars in Malaysia.

 

This puts CapitaLand firmly on track to create its proposed pure-play Malaysian retail REIT by the end of the year.

 

CapitaLand had earlier bought Gurney Plaza and Mines Shopping Fair.

 

Source: 938Live

HL scores in Seoul

HL scores in Seoul

 

Attractive profit from sale of Millennium Seoul Hilton

 

SINGAPORE’S Hong Leong Group is selling the Millennium Seoul Hilton to Korean property developer Kangho AMC for nearly $700 million, reaping an attractive profit of about $465 million in the process.

 

:The 685-room hotel is in one of Seoul’s choicest districts. Hong Leong’s hotel arm, Millennium and Copthorne (M&C), bought it for the equivalent of £144.6 million ($387.8 million) in 1999.: The two parties now value the hotel at £287.9 million, but after taking into account some liabilities, agreed to a sale price of £232.6 million.

 

The price works out at US$830,000 ($1.14 million) per room, which is one of the highest sums paid for a hotel in Seoul, according to Hong Leong spokesman Gerry de Silva.

 

In fact, it comes close to the US$836,000 a room paid for the 807-room Plaza Hotel in New York by Israel’s Elad Group in 2004.

 

The Seoul sale comes only after former Daewoo Group chairman Kim Woo Choong was booted out from its 903-square-metre penthouse, which had been leased to him for 25 years for just US$0.31 a day. Daewoo had previously owned the hotel.

 

Hong Leong Group Chairman Kwek Leng Beng said: “The sale value attributed to the hotel demonstrates once again the underlying management skill of our group in maximising shareholder value. The M&C group’s strategy of being an owner of hotel assets remains unchanged. However, the opportunity for sale, whilst unsolicited, further strengthens the M&C group’s ability to take advantage of market and cyclical opportunities.”

 

M&C intends to use proceeds from the sale to increase its cash reserves in order to fund acquisition opportunities, earn interest income and reduce debt.

 

City Developments Limited (CDL) has already announced plans to invest between US$150 million and US$300 million in a commercial and residential project in Incheon.

 

M&C chief executive Richard Hartman said: “Seoul is a key gateway city and this will present us a more difficult decision on divestment. While the city has a challenging hotel operating environment particularly in Millennium Seoul Hilton, we have managed to achieve a profitable exit from the investment. We will be watching for suitable opportunities as they may arise in Korea.”

 

Source: Today Newspaper

M&C sells Seoul Hilton for $628m

M&C sells Seoul Hilton for $628m

 

CITY DEVELOPMENTS (CDL) hotel arm Millennium & Copthorne Hotels (M&C) has sold the Millennium Seoul Hilton hotel for $627.9 million.

 

CDL said in a statement yesterday that M&C had sold CDL Hotels (Korea), which is the owner of the Seoul Hilton, to Kangho AMC.

 

Although the hotel was valued at about $777.2 million, the sale price of $627.9 million was agreed on after taking into account the net liabilities of CDL Hotels (Korea) as at the end of last year, including a shareholder’s loan owed by the company.

 

M&C Hotels had bought the hotel in 1999 for US$228.5 million (S$312.5 million).

 

The deal is expected to be completed in September although it is subject to the satisfaction or waiver of certain conditions, including the approval of M&C shareholders at an extraordinary general meeting.

 

M&C Hotels chairman Kwek Leng Beng said: ‘The sale value attributed to the hotel demonstrates once again the underlying management skill of our group in maximising shareholder value.

 

‘The M&C group’s strategy of being an owner of hotel assets remains unchanged.

 

‘However, the opportunity for sale, while unsolicited, further strengthens the M&C group’s ability to take advantage of market and cyclical opportunities.’

 

Source: Straits Times

M&C sells Seoul hotel with gain

M&C sells Seoul hotel with gain

 

It will book profit of £155m from sale of Millennium Seoul Hilton

 

KWEK Leng Beng’s London-listed hotel arm Millennium & Copthorne Hotels (M&C) is selling Millennium Seoul Hilton for about 580 billion Korean won (around S$767 million). This will bring a profitable end to a difficult relationship M&C has had with the asset. The chain has faced labour problems as well as escalating labour costs operating the hotel.

 

Mr Kwek bought the freehold property in 1999 for US$228.5 million. M&C will book a pre-tax profit of £155 million (S$417.4 million) from the divestment, which is subject to M&C shareholders’ approval. The hotel chain will use cash from the sale to finance acquisition opportunities, among other things.

 

Workers in the hotel went on a strike in 2000 and even after that was resolved, M&C continued to battle rising labour costs in Seoul. But the unsolicited offer for the property from Korean real estate and architectural services group Kangho was just too good to refuse for Mr Kwek.

 

The sale price works out to US$832,000 per room, nearly matching the US$836,000 achieved for The Plaza in New York, which M&C sold in 2004.

 

That was the last major asset sale by M&C, which had owned the hotel – which enjoys a prime location at Central Park South/Fifth Avenue – jointly with Saudi billionaire Prince Alwaleed bin Talal.

 

Millennium Seoul Hilton’s sale price of about £287.9 million works out to 35 times the hotel’s £8.2 million profit before tax last year. ‘The price is very good. I could not refuse,’ Mr Kwek said in an interview with BT yesterday.

 

Mr Kwek had been criticised for overpaying for the Seoul hotel when he bought it nine years ago from Daewoo Group. He beat 11 other contenders that had been shortlisted out of an initial 20 bids.

 

M&C is keen on buying a replacement hotel in Seoul, preferably a ‘brand new hotel’, Mr Kwek said. M&C is also on the lookout for acquisitions in Japan, US and Europe to fill gaps in its hotel portfolio.

 

‘We’ve been trying in Japan for a long time, but no one was willing to sell hotels in the past. Now, we can see some hotel owners, including funds, selling because of the credit crunch and tighter bank lending. But it’s still early days,’ said Mr Kwek.

 

The group could also look at opportunities to buy hotel chains available for sale, though these tend to be more in the West currently rather than Asia, where the economies are stronger, he added.

 

The sale of Millennium Seoul Hilton ‘further strengthens the M&C group’s ability to take advantage of market and cyclical opportunities’, he said in M&C’s statement.

 

The completion of the sale is expected in September this year. M&C is about 53 per cent owned by Singapore-listed City Developments Ltd (CDL), which is controlled by Singapore’s Hong Leong Group, which in turn is owned by the Kwek family.

 

CDL last year inked a memorandum of understanding to develop a mixed development project that will include a hotel, in Incheon City near the International Airport.

 

M&C chief executive Richard Hartman said: ‘We will be maintaining a constant watch for suitable opportunities as they may arise in Korea. Seoul is a key gateway city and this will present a more difficult decision on divestment to us. While the city has a challenging hotel operating environment particularly in Millennium Seoul Hilton, we have managed to achieve a profitable exit from the investment,’ he added.

 

M&C has been managing the hotel since December 2003 after a management contract with Hilton expired, but under a franchise agreement, the group continues to use the Hilton name.

 

Millennium Seoul Hilton was in the news recently in Korea, where a court ruled in favour of CDL Hotels (Korea), an indirect subsidiary of M&C which owns the hotel, after the company filed a lawsuit to nullify a long-term lease for a penthouse on the hotel’s 23rd floor to former Daewoo Group chairman Kim Woo-choong. The hotel’s previous owner, Daewoo Development, signed the 25-year lease contract with Mr Kim in early 1999 for just 328 won or about 31 US cents per day.

 

Source: Business Times

Cheung Kong Holdings keen on Singapore

Cheung Kong Holdings keen on Singapore

 

Mr Li Ka Shing’s Cheung Kong Holdings, Asia’s second-largest developer by market value, said it is keen to invest in Hong Kong, China and Singapore as the region’s property market is undergoes a “small consolidation”.

 

Prime offices and industrial parks offer investment opportunities because of economic “fundamentals” in the region, Cheung Kong’s Executive Director Justin Chiu said at a property conference in Singapore yesterday. He said he doesn’t expect “significant” price declines in the next 18 months.

 

Added Mr Chiu: “We’re just at the low tide of the economic cycle. When we clear the sub-prime issues, I’m fairly confident Asia will come back.”

 

Property developers are seeking more investments to meet rising demand in China and India, the two fastest-growing major economies in the world. China’s economy is forecast by the World Bank to expand by 9.8 per cent this year, even though gains in home prices slowed.

 

“Across all three markets in the world – America, Europe and Asia – the best prospects, in my view, are for Asia right now,” said Mr Sameer Nayar, head of real estate finance at Credit Suisse. “It is just because you are talking about half the world’s population and most of the world’s growth in gross domestic product is coming from Asia.”

 

Mr Chiu said that residential developments may be riskier because they are more dependent on the domestic economy. Home prices in Singapore are easing after rising to record highs last year as a global credit squeeze damped demand, while Hong Kong’s home sales fell for a second month as prices cooled.

 

Sales by value of residential units in Hong Kong slumped 31.1 per cent in May from a year earlier to HK$26.3 billion($4.6 billion), the biggest drop in 19 months, after falling 30.1 per cent in April.

 

China’s home prices rose 9.2 per cent in May, the slowest gain since September 2007. New home prices increased 10.2 per cent last month from a year earlier. – Bloomberg

 

Source: Today Newspaper

Frasers to invest in China, India

Frasers to invest in China, India

 

Emerging markets are a part of its expansion plan

 

Frasers Hospitality, Asia’s second-biggest serviced-apartment operator behind CapitaLand’s Ascott Group, is in talks to set up private equity funds to invest in China, India and South-east Asia after delaying its planned share sale.

 

The company, which expanded its portfolio eight-fold to 3,287 apartment units in the past decade, is raising funds for new developments including markets such as Vietnam and Indonesia, said Frasers’ chief executive Choe Peng Sum.

 

Said Mr Choe: “A lot of people are still interested in Vietnam. We think China and India are a very good counter to what’s happening with subprime. There’s a slowdown, but there’s still a gravitation towards the emerging markets.”

 

Frasers Hospitality, a unit of Singapore’s Fraser & Neave, is raising funds as it seeks to more-than-double its portfolio to more than 8,000 apartments in the next three-to-four years. The company, which plans to add nine properties this year, said its share sale has been delayed by at least a year as the benchmark Straits Times Index fell 14 per cent this year.

 

Frasers said on its website that 90 per cent of its guests are from multinational companies in industries such as banks, oil and gas, and engineering. The company has properties in Asia, the Middle East and Europe, and plans to open new apartments in Bahrain, Dubai and Chengdu in China in the next two years.

 

“If the economy is slowing down, then the travel gets curtailed for a little bit and growth plans get deferred a year or two, so that’s a sector that may be affected more than other sectors,” said Mr Kurt Roeloffs, Asia chief executive officer of RREEF Alternative Investments, which manages 55.6 billion euros ($117.8 billion) globally.

 

China and India are expected to expand amid the possibility of a world recession, the International Monetary Fund said two months ago. China will expand 9.3 per cent this year, slower than a previous forecast of 10 per cent, the IMF said. India’s growth is estimated to be 7.9 per cent this year, down from an earlier prediction of 8.4 per cent, it added. – Bloomberg

 

Source: Today Newspaper

CapitaLand seeks Vietnam land as prices fall

CapitaLand seeks Vietnam land as prices fall

 

CapitaLand said land prices in Vietnam and India have fallen by as much as 15 per cent this year, making it easier to get sites now than a year earlier.

 

There may be more opportunities in “greenfield sites”, chief investment office Kee Teck Koon said at a property conference held here yesterday. CapitaLand is also looking at expanding in Japan, where it may acquire properties and set up funds for investments, Mr Kee said.

 

CapitaLand, which owns properties in more than 20 countries, made about 76 per cent of revenue last year outside Singapore. It’s also expanding as the credit crunch amid writedowns by banks on sub-prime-related investments weed out smaller competitors.

 

“It’s a global liquidity crisis, so the chances of this continuing in perpetuity is very low,” said Mr Michael Smith, head of Asia real estate investment banking at Goldman Sachs Group. “I think one day we’ll look back at this year and say this is a real opportunity to invest in Asian real estate.”

 

CapitaLand said earlier this month it’s looking for distressed assets in Japan and China to help its expansion in the two markets. The developer already runs two property funds in Japan and teamed up with Mitsubishi Estate in a Tokyo project worth as much as US$1.5 billion ($2.04 billion).

 

There may also be opportunities to buy Japanese real estate investment trusts on the cheap, said Mr Kee as some may have difficulty refinancing short-debt term amid the credit crunch. CapitaLand may buy more land in Vietnam and India on expectations that “there’ll be easier access to choice sites”, Mr Kee said. – Bloomberg

 

Source: Today Newspaper