Perennial-led consortium to sell Chinatown Point Mall for $520m

In July 2010, Perennial syndicated a consortium of investors to form Perennial Chinatown Point LLP (PCP LLP) to acquire Chinatown Point Mall for $250 million.
In July 2010, Perennial syndicated a consortium of investors to form Perennial Chinatown Point LLP (PCP LLP) to acquire Chinatown Point Mall for $250 million. PHOTO: PERENNIAL REAL ESTATE HOLDINGS LIMITED

SINGAPORE - Perennial Real Estate Holdings (Perennial) and its consortium of investors, including Singapore Press Holdings (SPH), are selling their stakes in Chinatown Point Mall for $520 million in total, the listed companies announced on Monday morning (April 22).

This includes the divestment of their entire interests in the retail mall, and four strata office units in Chinatown Point, an integrated development located in the heart of the Chinatown precinct, within Singapore's central business district.

In July 2010, Perennial syndicated a consortium of investors to form Perennial Chinatown Point LLP (PCP LLP) to acquire Chinatown Point Mall for $250 million. On Monday, Perennial said PCP LLP has entered into a share purchase agreement with PAR Chinatown Point, a wholly-owned vehicle of a fund managed by Pan Asia Realty Advisors (Singapore). Pan Asia Realty Advisors (Singapore) is in turn, a joint venture between Mitsubishi Estate Co and CLSA.

Perennial said the transaction is in line with its active capital recycling strategy to rebalance its portfolio, enhance its financial flexibility, and maximise its returns to shareholders.

The deal value includes $225 million in cash for the issued shares, and the assignment of shareholder loans. The transaction price of $520 million also translates to $2,450 per square foot on total net lettable area of Chinatown Point Mall.

Perennial is the largest investor in Chinatown Point Mall with a 50.64 effective interest, and its proportionate stake of the net proceeds is expected to be about $125.3 million, subject to final adjustments, the company said.

The other investors include SPH, which publishes The Straits Times, and FPTM Pte Ltd, among some other private investors.

In a separate filing to the Singapore bourse on Monday, SPH said its expects its share of gain to be about $10 million. SPH's wholly-owned subsidiary, CT Point Investments Pte Ltd, has a direct stake of 30.68 per cent in PCP LLP.

Since Chinatown Point Mall was acquired in 2010, a major redevelopment exercise was carried out costing over $91 million. Two of Perennial's wholly-owned subsidiaries were appointed asset manager and property manager of Chinatown Point Mall.

Perennial said that subject to the conditions precedent being satisfied, the transaction is expected to close on or about June 6. Following the completion, Perennial (Singapore) Retail Management, will continue in its role as the property manager of Chinatown Point Mall.

Pua Seck Guan, CEO of Perennial, said: "The transaction is a testament to Perennial's ability in identifying quality assets, creating value via enhancement initiatives, and ultimately unlocking value via divestment for all stakeholders."

Separately, Perennial on Monday also noted in a profit guidance that it expects to post a first-quarter net loss for the three months ended March 31, primarily due to weaker operating performance of its newly operational assets, as well as higher financing costs.

The group expects to turn profitable in the second quarter on completion of the disposal of its stake in Chinatown Point Mall. It added that further details of the group's performance will be disclosed when it releases its Q1 results in May.

As at 9.17am on Monday, Perennial shares were trading flat at $0.64, while SPH shares were trading at $2.46, down 0.4 per cent, or one cent.