Tuan Sing buys Katong Mall for $219m

Source : Straits Times - 1 Jul 2008

PROPERTY group Tuan Sing Holdings bought Katong Mall for $219 million yesterday, in the first major collective sale of the year.

The four-storey complex of strata-titled shops and other businesses is the first fully retail site to be sold collectively, said marketing agent Jones Lang LaSalle (JLL).

The 78,158 sq ft site with a gross plot ratio of 3.6 went on sale at an indicative price of $220 million to $250 million.

Tuan Sing’s price values the land for the 99-year leasehold mall at about $865 per sq ft, including a lease top-up of $24.5 million.

It bought the mall through its unit Golden Cape Investments.

JLL investments director Stella Hoh told The Straits Times that ‘a few parties’ - including large and small property groups - entered bids and expressions of interest but she declined to reveal names.

Savills Singapore director for business development Ku Swee Yong said the sale was likely to be one-off and not indicative of a broader market trend, while Knight Frank director for research and consultancy Nicholas Mak said the deal was fairly priced given market conditions.

The mall went on sale in May amid some controversy.

Its public tender followed a contentious process from last September, when 35 minority owners claimed that they were not consulted in drawing up the collective sale deal.

They also took issue with the low reserve price - believed to be $180 million - and the fact that the sale was being conducted under the old rules and not the stricter new ones that took effect in October.

The owners also complained that two majority owners - Nustavino and Habitat Properties - had a potential conflict of interest as they were developers that could bid for the property. There were even questions raised during the tender launch over whether the consent of owners representing 80 per cent of the share value needed for the sale had been obtained.

Minority owner Robert Ong said the price was ‘above what we had expected’ but added that the minority owners could appeal against the sale to the Strata Titles Board.

Meanwhile, Tuan Sing already has a stake in the mall, obtained via an asset swop approved by its shareholders last month.

The mainboard-listed firm disposed of $107 million in loans owed by its associate Gul Technologies Singapore through an asset swop with the controlling shareholders of Tuan Sing for certain strata units in Katong Mall.

This involved 129 strata shop units with an aggregate purchase consideration of $63.1 million.

Tuan Sing said the deal allowed for a ‘realistic and tangible recovery of the loans, although it would have to recognise a partial write-down’ of about $44 million.