SINGAPORE (THE BUSINESS TIMES) - Perennial Real Estate Holdings is divesting its entire 30-per-cent stake in 111 Somerset, known locally as TripleOne Somerset, to gambling mogul Stanley Ho's Shun Tak Holdings for $155.1 million in cash.
111 Somerset is a prime integrated development, comprising two premium-grade office towers and a retail podium. It is located in the Orchard Road precinct and next to Somerset MRT station, and is also near the affluent Devonshire and River Valley residential areas.
Shun Tak already owns the remaining 70 per cent stake in the development, having bought it for $1.26 billion from a Perennial-led consortium in January 2017.
In the current deal, Perennial, through a subsidiary, will sell its 30-per-cent stake in Perennial Somerset Investors to Simply Swift Limited, a unit of Shun Tak. Perennial Somerset Investors owns 111 Somerset.
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 real estate player stands to net a pre-tax gain of about $25 million from the deal.
ST understands that the sale is based on a total property value of $1.14 billion, translating to $2,250 per square foot on net strata area.
The consideration was determined based on factors including the current and expected market value of 111 Somerset upon the completion of an asset-enhancement programme, which is currently underway.
Just last year, the property had undergone a major asset-enhancement exercise costing about $120 million. Works had involved enhancing the retail offerings at the retail podium, incorporating medical suites of about 32,000 sq ft, and sprucing up the office lobby and common areas.
The transaction is expected to be completed on May 31 or the date falling five business days from the date on which all condition precedents are satisfied - whichever is the later.
Post-transaction, Perennial (Singapore) Retail Management will remain the property and project manager of 111 Somerset.
