Oxley Holdings has received an expression of interest from an anonymous suitor to buy the retail and banking podium of Singapore’s Chevron House for S$315 million ($223 million), the company said this week, with the reported offer coming in 34 percent below what the developer had been asking for the property last year.
The Singapore-listed developer, which saw its debt levels soar to S$3.6 billion as of September 2019, announced in a regulatory disclosure yesterday that the unnamed suitor had paid a refundable deposit of S$3.15 million for the podium of what is now known as 30 Raffles Place, with the option of entering a binding sale and purchase agreement by 15 June.
The announcement comes eight months after Oxley put the commercial space on the market at an asking price of S$475 million, as the developer chaired by Ching Chiat Kwong sought to offload the podium in order to meet contractual obligations on its separate S$1.025 billion deal to sell the office component of the 32-storey skyscraper to US real estate fund manager AEW.
Should the anonymous party agree to buy the podium, Oxley said it expects the divestment of this asset to be completed by 30 June.
Meeting Contractual Obligations on 30 Raffles Place
Based on the podium’s combined 119,800 square feet (11,130 square metres) of gross floor area, Oxley would be selling the property for S$2,629 per square foot.
The podium’s lower four storeys – including two basement levels – cover a combined 61,514 square feet of retail space, while the top three office floors offer 58,286 square feet of gross floor area.
Oxley announced the deal discussions just under a year after AEW paid $210 million for an 82 percent stake in the 30 Raffles Place commercial tower, with the balance of the agreed S$1.025 billion to be paid only after the developer meets a set of conditions, including selling the podium.
Mingtiandi understands that JLL and Cushman & Wakefield, which had been appointed joint sole agents for marketing the podium in September last year, have not been involved in the discussions revealed by Oxley in its stock exchange announcement yesterday.
A separate source told Mingtiandi that AEW has confirmed that it is not the potential buyer of the podium – although its agreement to purchase the skyscraper still stands.
Oxley’s mystery suitor has materialised at a time when purchases of Singapore commercial property has come to a near halt with the COVID-19 pandemic and the city’s circuit breaker measures having ruled out site inspections and increased uncertainty in the market.
Investment in Singapore’s income-generating real estate assets totalled just $432 million during the first three months of this year – plunging 78 percent from the same period a year before, according to Real Capital Analytics.
Selling in a Downturn
Oxley has made a series of asset disposals over the past two years, as it looks to service a debt mountain built up as the developer acquired properties in the UK and Ireland at the same time that it expanded its portfolio in Singapore.
Last December, the developer entered into a memorandum of agreement to sell 3 Dublin Landings for €115 million, parting with the last of five office buildings it had developed in the Irish capital.
In March last year, Oxley had to call off the S$950 million sales of its Novotel and Mercure hotels on Stevens Road in Singapore after would-be buyer Gracious Land Pte Ltd failed to meet the deadline for a scheduled deposit of S$38 million.