One of China's richest men is buying a commercial building in the heart of Raffles Place.
Mr Ji Changqun, a Nanjing businessman behind Hong Kong-listed Fullshare Holdings, will pay $725.2 million for the holding company that substantially owns GSH Plaza, formerly known as Equity Plaza.
The seller of the holding company, Plaza Ventures, is a consortium led by a unit of GSH Corporation, which is controlled by popiah magnate Sam Goi. GSH Corporation holds 51 per cent, partner Vibrant DB2 has 35 per cent and TYJ Group, Mr Goi's private investment vehicle, has a 14 per cent stake.
The consortium purchased the 28-storey building in 2014 from Keppel Land and Alpha Investment Partners for $550 million and is spending about $100 million on refurbishment, said GSH Corporation chief executive Gilbert Ee. It should obtain its temporary occupation permit in one to two months, he added.
Mr Ee told The Straits Times yesterday that while the company had originally bought the building, which is next to Republic Plaza, for the long term, the offer "allowed us to realise fairly good returns".
He added that the other partners were keen on the offer, as the profit margin was in excess of 20 per cent.
What differentiated the buyer was also his speed, said Mr Ee. "We had other interested buyers, but he was faster. He was very decisive, he knew exactly what he wanted. If it went on, there could have been a higher offer, but he was quite keen on the transaction."
Fullshare has caught the attention of the market for its soaring share price in the past three years. The success of the HK$65.9 billion (S$12 billion) firm has propelled Mr Ji to China's rich list, with Forbes naming him the country's 25th wealthiest person last year. While he keeps a low profile, his transactions are decidedly more showy. Fullshare gained majority control of China's largest maker of gearboxes for wind-power turbines - a larger and more profitable company - through a share swap offer last November.
Its last transaction here in 2014 also made headlines. It bid $169,000 a month for the site of the former Bottle Tree Park in Yishun, double the bid of the previous firm running a rustic leisure park on the land.
Once refurbishment is completed, its Raffles Place asset will have 259 strata office units and two floors of retail space. GSH will occupy the top floor, while Fullshare is likely to move into the building.
Mr Goi, executive chairman of GSH and TYJ group, said: "We'd earlier acquired the entire 28th floor of GSH Plaza for our corporate headquarters, and look forward to moving there in the second quarter of 2017."
The deal valued its available office units at $2,900 per sq ft, a price analysts said was attractive. Ms Christine Li, director of research at Cushman and Wakefield, said: "The bulk sale price is a discount of 9.5 per cent from the average price of $3,204 psf for all GSH Plaza strata office units sold in 2016."
She noted that the price was 11.5 per cent higher than the $2,600 psf price paid in Epic Land's bulk sale of Prudential Tower last month, despite the GSH sale being about three times larger.The sale also reflects the interest of foreign buyers in Singapore's office sector, she said.