View of the Cliveden at Grange condominium. (Photo: CDL)
According to a report in The Business Times, property firm City Developments Limited (CDL) has appointed JLL to help search for potential investors for its third Profit Participation Securities (PPS) platform, which involves three residential projects in Singapore.
A PPS platform is defined as a type of floating rate note which has its coupon linked to the profits of the issuer.
Target investors in CDL’s PPS deal will likely include institutional and private equity investors, high net worth individuals and family offices, revealed a Credit Suisse report.
The portfolio will comprise 48 residential units worth an estimated $350 million, which translates to around $2,300 psf, the report said.
The units are understood to be mostly leased, and comprise 22 units at Cliveden at Grange, 14 units at One Shenton, and 12 units at St Regis Residences. CDL is reportedly offering a coupon to co-investors guaranteeing three percent per annum.
“Given the properties were completed between 2008 and 2011, CDL should record a healthy gain on divestment as well,” said Credit Suisse.
In addition, the financial services company believes CDL is preparing for a separate PPS deal involving commercial assets. This would bring the group closer to achieving its goal of $5 billion in assets under management under its funds platform by 2018.
Under two previous PPS deals, CDL managed to gain $2.6 billion, said Credit Suisse.
Meanwhile, CDL has clarified its position on the deal, which it said was at a very early stage.
In a statement issued on Friday (27 May), it said: “Like all real estate companies in the current climate, CDL continuously evaluates numerous alternatives for preserving value.
“No definitive agreements have been entered into and there is no assurance that this potential PPS project will materialise in the near-term. There is also no certainty at this preliminary stage on the final salient terms for this potential PPS project.”
CDL added that the anticipated price will also be much higher than $2,300 psf due to the “intrinsic value” of its assets.
“The company will make further announcements if and when any deal on this subject materialises,” it said.