Chip Eng Seng Corporation is exiting an Australian redevelopment project named Tower Melbourne, now that it has found a buyer willing to pay A$55 million (S$56.5 million) for the site.

The group said yesterday that it has entered into an agreement with the purchaser, who is not related to the company or its controlling shareholders.

This property, acquired by the group in September 2011 for A$25.5 million, was originally a commercial building.

The group had plans to redevelop it into a 71-storey tower comprising 581 freehold residential units.

But protracted legal proceedings with the owner of the adjoining property, who raised objections to the demolition works, prevented the group from completing the demolition.

Due to the impasse, Chip Eng Seng cancelled some 556 sales contracts with buyers of these residential units last November and returned the full deposit of 10 per cent of purchase price with interest.

Chip Eng Seng said it considers the sale of the property to be its most viable option now.

"The opportunity to sell the property presents the company with a clean exit from the Tower Melbourne project given that it is no longer feasible for the company to move forward with the project," it added.

"Continuing to hold the property while the legal proceedings remain unresolved would also mean that the company will continue to incur additional expenses in ensuring that the site is secure."

The sale will also allow the group to unlock some value from the property and use the net proceeds to fund its operations and new acquisitions that may arise in the future, the group said.

The adjoining property owner is concurrently selling its property as part of the same sale process. The group noted that this may present an avenue for both parties to work towards an expedient out-of-court settlement.

The proposed disposal of Tower Melbourne will contribute positively to the net tangible assets and the earnings per share of the group for the current financial year ending Dec 31, 2018.