City Developments announced on Tuesday that it has partnered with Blackstone's Tactical Opportunities Fund and CIMB Bank Berhad, Labuan Offshore Branch, to create a unique investment platform that will invest in the cashflows of CDL's properties in Sentosa Cove, called the Quayside Collection.
It said that through this transaction a total of $1.5 billion will be raised.
Said CDL executive chairman Mr Kwek Leng Beng: "This offers investors a rare opportunity to participate in the cashflow from high-quality assets in Sentosa Cove. By leveraging on the operating strength and solid cashflows of the Quayside Collection, we will be able to build and deploy capital for our global plans."
The Quayside Collection, an upscale integrated development at Sentosa Cove, comprises three adjacent properties developed by CDL:
• The 5-star W Hotel
• Quayside Isle, a waterfront F&B and retail property
• Apartments of The Residences at W Singapore
CDL said the Profit Participating Security (PPS), as the investment instrument is called, will see the investors receive a fixed payout based on 5 per cent interest per annum for a period of five years, in addition to a participation in the cashflows over the period that they hold the PPS.
The total aggregated value of the PPS is $750 million, comprising $281 million subscribed by Astoria Holdings Limited, a wholly-owned subsidiary of CDL; Blackstone's Tactical Opportunities Fund will invest $367 million; and CIMB Bank will contribute $102 million. Concurrently, DBS Bank Ltd. and Oversea-Chinese Banking Corporation Limited will provide $750 million in value of senior loan facilities.
Said Mr Kwek: "There is no other cluster of upscale assets with similar waterfront living in Singapore. Quayside Collection's exclusivity makes this cashflow participation platform all the more unique for investors."
He added that CDL remains a substantial investor in the PPS, "reflecting our commitment and belief in our Sentosa Cove assets."
Mr Stephen Schwarzman, chairman, co-Founder and CEO of Blackstone said, "At Quayside Collection in Sentosa, CDL has created a distinctive portfolio of assets. We are delighted to partner them in this transaction and further cement our long-term commitment to Singapore."
Tengku Dato' Zafrul Tengku Abdul Aziz, acting group chief executive of CIMB Group added, "This is a unique investment opportunity and reinforces our strong relationship with CDL."
CDL said the PPS is the latest of a number of unique platforms which it has unveiled. Several years ago, it broadened the range of financial instruments it can use by issuing Sukuks or Islamic financing, and was also the first to launch a hotel-based real estate investment trust (or "H-REIT").
CDL said the Quayside Collection, which it will continue to manage, has been operational for over two years and has enjoyed strong cashflows and recurring income.