The joint tenders plan to seek approval from the URA to redevelop the commercial property into a “mixed-use development. Photo: Cushman & Wakefield
SingHaiyi Investments (a subsidiary of SingHaiyi Group), Chip Eng Seng, and Chuan Investments have jointly won the collective sale tender for Maxwell House for $276.8 million.
Maxwell House is a 13-storey commercial development featuring 145 strata units at Maxwell Road. With a 99-year leasehold tenure starting from June 1969, the property sits on a 3,883 sq ft site that is zoned for “Commercial” use under the 2019 Master Plan, with a plot ratio of 4.3.
The joint tenders, however, plan to seek approval from the Urban Redevelopment Authority (URA) to redevelop the property into a “mixed-use development with a gross plot ratio of at least 5.6 and gross floor area (GFA) of at least 21,746 sq m, of which up to 20% of the total GFA will be zoned for commercial use,” said SingHaiyi in an SGX filing on 7 May.
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“The joint tenderers will also seek in-principle approval from the Singapore Land Authority (SLA) to issue a fresh 99 years lease.”
It revealed that the joint tenderers will also enter into a joint venture (JV) agreement to set out the terms relating to the property’s acquisition and redevelopment.
In fact, the joint tenders have entered into a Memorandum of Understanding, which provides, among others, that CEL Development, Chip Eng Seng’s wholly-owned subsidiary, will take a 40% stake in the JV.
SingHaiyi Investments and Chuan Investments, on the other hand, will each take a 30% stake.
“The joint tenderers shall pay for the purchase price of the property as well as any costs, expenses and taxes in relation to the acquisition in their respective participation proportions,” said SingHaiyi.
They will also contribute equity and other financial support, which includes additional equity, shareholders’ loans and/or guarantees into the JV based on their respective participation proportions.
And since Gordon Tang and Celine Tang are controlling shareholders of both Chip Eng Seng and SingHaiyi, the deal is considered an interested person transaction for the two companies.
The audit committee of SingHaiyi believes “the risks and rewards relating to the project are in proportion to the eventual equity of each joint tenderer”.
They also believe that the terms of the MoU are “on normal commercial terms and are not prejudicial to the interests of the company and its minority shareholders”.
SingHaiyi noted that shareholders’ approval for the deal is not required since the risks and rewards are in proportion to each tenderer’s participation and the “interested persons do not have an interest in the project prior to the signing of the MoU”.
SingHaiyi does not expect the investment in the project to materially affect “the consolidated net tangible assets per share and consolidated earnings per share of the group for the financial year ending 31 March 2022”.
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Victor Kang, Digital Content Specialist at PropertyGuru, edited this story. To contact him about this story, email: firstname.lastname@example.org