Perennial Real Estate Holdings (PREH) is leading a group of investors that are selling their combined 70 per cent stake in TripleOne Somerset to Hong Kong's Shun Tak Holdings.
The divestment is being done in two parts. In the first, PREH and six other shareholders of Perennial Somerset Investors (PSI), their holding company for TripleOne Somerset, are offloading a combined 61 per cent stake in the property for $305 million.
PREH, which originally held 50.2 per cent of PSI, is divesting a 20.2 per cent slice while retaining 30 per cent. It will collect about $101 million for the sale, making a pre-tax gain of about $34.3 million.
The other six shareholders, all of whom have fully divested their stakes in PSI, are SingHaiyi Group, Boustead Projects, BreadTalk Group, Shun Fung Holdings, ROOI Holdings and Grandma's Holdings.
In the second divestment, Unified Elite Limited, another existing shareholder of PSI and a connected person to Shun Tak, will sell its 9 per cent stake to Shun Tak.
Shun Tak, which is making the purchase through its wholly-owned unit Simply Swift, will then own 70 per cent of PSI while PREH retains 30 per cent.
PREH syndicated a consortium of investors in December 2013 to acquire TripleOne Somerset for $970 million.
Its wholly-owned subsidiaries were appointed the development's project manager, asset manager and property manager and will continue to undertake these operations after the divestment.
The sale price was based on an agreed total property price of about $1.258 billion, or $2,200 per sq ft.
The divestments are expected to be completed by June 30.
PREH will use the proceeds from selling its 20.2 per cent to fund investments, the firm said.
TripleOne Somerset is a prime integrated development comprising two premium-grade office towers and a retail podium next to Somerset MRT station.
A $120 million refurbishment programme is under way at the development to augment the retail offerings, incorporate medical suites of about 32,000 sq ft and spruce up the office lobby and common areas.
In August last year, TripleOne Somerset officially launched the strata sale of its office space and medical suites at Somerset Tower, one of its two office towers. A few office units have since been transacted at an average price of above $2,600 per sq ft.
PREH chief executive Pua Seck Guan said: "Shun Tak's investment in TripleOne Somerset is a strong testament of their confidence in the Singapore market and the long-term value which can be created at the integrated development from the strata sale of the office space and medical suites and repositioning of the retail podium."
The retention of a 30 per cent stake in TripleOne Somerset will provide PREH with income stability and the opportunity to enjoy the upside from the strata sales and enhancement works, he added.