No certainty Orchard Towers' potential $1.6b collective sale will proceed: Hiap Hoe

Completed in the early 1970s, Orchard Towers has a plot ratio of 4.9 and a site area of about 6,130 square metres. PHOTO: BT FILE

SINGAPORE (THE BUSINESS TIMES) - Property developer Hiap Hoe, which owns 21 shops and 38 offices at Orchard Towers, has reiterated to its shareholders that there is no certainty that the mixed-use development's intended collective sale will proceed or be completed.

There is also no certainty that the requisite 80 per cent consent from unit owners will be obtained.

"Accordingly, shareholders are advised to exercise caution in dealings with the shares of the company, to read this announcement and any further update announcement(s) released by the company carefully," the mainboard-listed firm noted in a bourse filing after the stock market closed on Friday (Feb 4).

On Friday morning, The Business Times reported that the collective sale committee of Orchard Towers had recommended setting the reserve price at $1.6 billion.

The unit owners will vote on whether to approve the proposed price tag and the method of apportionment of sale proceeds, among other things, at the upcoming extraordinary general meeting on Feb 18.

Before the marketing agent Edmund Tie can launch a collective sale tender, at least 80 per cent of the unit owners will have to agree to the collective sale.

Completed in the early 1970s, Orchard Towers has a plot ratio of 4.9 and a site area of about 6,130 sq m.

The freehold development spans two buildings, with retail and office space in the front tower along Orchard Road, and some commercial units and 58 private residential units in the rear 25-storey tower along Claymore Road. There are 361 carpark lots.

If a deal goes through, Orchard Towers would become Singapore's most expensive collective sale, eclipsing the $1.34 billion that the former Farrer Court fetched during the 2007 collective sale boom.

Another collective sale candidate, International Plaza in Tanjong Pagar, was put up for sale at even higher reserve price of $2.7 billion. However, its marketing agent, also Edmund Tie, has not disclosed the outcome of the tender, which closed on Nov 30, 2021.

Following the Dec 16 cooling measures, property analysts are expecting the collective sale market to lose momentum as developers turn more cautious. Overpriced sites in particular are unlikely to find buyers amid heightened risks.

Hiap Hoe said its board will provide further material updates of the collective sale at the appropriate time.

Last August, the company's shares had risen sharply in early morning trade, after Hiap Hoe disclosed that it owned the 59 strata lots in Orchard Towers via its subsidiary Golden Bay Realty.

On Friday, before Hiap Hoe's latest filing, the stock finished unchanged at 64 cents.

Join ST's Telegram channel and get the latest breaking news delivered to you.