Boustead Projects JV Picks Up Sin Capital’s Orchard Road Tower for $371M

Boustead Projects JV Picks Up Sin Capital’s Orchard Road Tower for $371M thumbnail

30 Bideford Road Singapore

30 Bideford Road is located opposite Orchard Road’s Paragon shopping centre

A joint venture led by developer Boustead Projects has agreed to acquire a mixed-use building near Singapore’s swanky Orchard Road for S$515 million ($371 million), taking advantage of a distressed asset sale to pick up a prime property at a discount.

With Boustead holding a 50 percent stake, the consortium is picking up 30 Bideford Road, an 18-storey tower on a freehold site at a 6.4 percent discount to the property’s market value of S$550 million as determined by Savills, Boustead Projects said Friday in a filing with the Singapore Exchange.

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With Roark Capital and family-run local firm Lim Teck Lee Investments splitting equally the remaining half-stake, the joint venture are acquiring the two year old asset from liquidators appointed after local private equity firm Sin Capital had in 2020 defaulted on a S$110 million bond backed by the property opposite Orchard Road’s Paragon shopping centre.

Known for developing a portfolio of industrial properties in Singapore and around Asia, Boustead said in its statement to the Singapore exchange that, “The acquisition will enable the company to expand and diversify its property portfolio, as well as increase its income streams through the ownership and management of the property.”

Liquidation Sale

The Boustead JV is picking up the 157,561 square foot (14,638 square metre) property at a more than 14 percent markdown to the indicative price of S$600 million when the tower was put up for sale by receivers employed by KPMG last December.

Boustead chairman John Lim Kok-Min

Boustead chairman John Lim Kok-Min

Sin Capital, currently mired in a dispute over the sale of its Fullerton Healthcare unit, had purchased the former Thong Sia Building in 2015 and redeveloped it into 168 serviced apartments under the Orchard Hills Residences banner and 54,512 square feet of retail, office and medical space.

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Last August, the Boustead Projects-led consortium paid S$117 million to acquire S$110 million in overdue mezzanine notes issued by a Sin Capital unit and secured by 30 Bideford Road. Just a month later, Boustead announced that the Sin subsidiary had failed to resume paying principal and interest on the notes and the consortium had taken ownership of the company’s share capital.

Friday’s filing marked the Boustead-led group gaining ownership of a property which sits 600 metres (656 yards) away from Somerset MRT station on the North-South Line and close to other high-end residences, hotels, offices and malls, including The Paragon, Ngee Ann City and Mandarin Gallery.

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Designed by Japanese architectural firm Nikken Sekkei, 30 Bideford Road is planned to  earmarked to attain Green Mark Platinum status under Singapore’s sustainable building scheme, after having first attained its temporary occupation permit in early 2020

The property, which occupies a 21,602 square foot site will join a Boustead portfolio which also includes the [email protected] smart business park property in Singapore’s One-North and the 161,458 square foot GSK Asia House in nearby Rochester Park.

Humming With Deals

The Bideford Road tower changes hands after Singapore’s real estate market enjoyed its strongest start to a year in a decade, thanks largely to foreign players driving a 21 percent annual increase in transactions of income-earning assets in the first quarter, according to MSCI.

Trades of rent-producing commercial, residential and industrial buildings hit $2.3 billion in the first three months of 2022, boosting Southeast Asia’s wealthiest city to its highest January-to-March tally in 10 years, with nearly half of the purchases being made by overseas buyers, according to the latest Asia Pacific Capital Trends report from the market data provider.

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PAG was the biggest investor in Singapore during the first three months of 2022, after the Hong Kong-based private equity firm snapped up the Cross Street Exchange from Frasers Logistics & Commercial Trust in January for S$810.8 million ($603 million), with that deal ranking as the region’s fifth-largest single asset transaction and the biggest commercial deal in the city during the period.

Another major Singapore commitment by an overseas investor was Japan’s Kajima Corp picking up an office block at 55 Market Street from Boston-based fund manager AEW for S$286.9 million in February.

In a more recent splash, AEW this month agreed to buy the Westgate Tower in Jurong East from local investment firm Sun Venture for S$680 million.

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