Mingtiandi

Asia real estate and outbound investment news

  • Facebook
  • LinkedIn
  • RSS
  • Twitter
Sign Up / Login Logout

Lost your password?
Register
Forgotten Password
Cancel

Register For This Site

A password will be e-mailed to you.

  • Capital Markets
  • Events
    • Mingtiandi 2023 Event Calendar
    • Mingtiandi APAC Residential Forum 2023
    • Mingtiandi Asia Logistics Forum 2023
    • Mingtiandi Hong Kong Focus Forum 2023
    • Mingtiandi APAC Data Centre Forum 2023
    • Mingtiandi Asia Office Strategies Forum 2023
    • Mingtiandi Singapore Focus Forum 2023
    • More Events
  • MTD TV
  • People
  • Logistics
  • Data Centres
  • Asia Outbound
  • Retail
  • Research & Policy
  • Advertise

Oxley Reboots Sale of S$950M Singapore Hotels After Buyer Balks

2019/03/24 by Jan Kot Leave a Comment

Oxley boss Ching Chiat Kwong

Oxley’s Ching Chiat Kwong is hunting for new buyers for his Orchard area hotels

Oxley Holdings has appointed new consultants to find a fresh buyer for its Novotel and Mercure hotels on Stevens Road after a previous suitor was found to have breached the terms of a letter of intent for purchase of the S$950 million ($702.20 million) pair of properties, according to an announcement to the Singapore exchange late Thursday.

The newly appointed consultants for the sale – brokerage JLL and its separate JLL Hotels and Hospitality Group, along with CBRE – now have joint exclusive rights to negotiate with new bidders for the 518-room Mercure and 254-room Novotel in Singapore’s Orchard Road area on behalf of the Singapore-listed developer.

The rebooted sale is one of number of disposals that Oxley has had in motion in recent months, including a pending S$1 billion sale of the Chevron House commercial building at Raffles Place, after the developer saw debt levels balloon last year.

Indonesian Said to Miss Payment on Hotels

The new agency appointments by Oxley were announced two days after the mid-sized real estate developer declared to the bourse that would-be buyer Gracious Land Pte Ltd had failed to meet the deadline for a scheduled deposit of S$38 million, forcing the termination of a preliminary agreement to sell the properties for S$950 million.

Mercure Stevens Road Singapore

Oxley had opened the pair of adjacent hotels in late 2017

Gracious Land – a recently formed private firm reportedly owned by Indonesian tycoon Tahir, the founder of the Mayapada Group – had been in the process of carrying out its due diligence on the properties, which Oxley had developed on a 103-year leasehold site it had purchased in 2013 for S$318 million.

The erstwhile buyer had made an initial deposit payment of S$9.5 million for the properties in early January, but had missed a subsequent payment due on 28 February, according to the statement from Oxley.

According to the developer, it has served notice to Gracious Land that it has terminated the letter of intent with immediate effect, and had informed the buyer that the initial deposit of S$9.5 million would only be refunded if “certain” criteria set out in the letter of intent were met, despite Gracious Land already having requested a refund from the developer. Gracious Land has yet to comment publicly on the failed transaction.

Following the announcement, Oxley’s share price fell by nearly six percent to close on Thursday at S$0.32 per share and remained at $0.32 per share at closing time on Friday.

Moving Assets in Asia and Europe

The collapse of the deal comes at an inconvenient time for the debt-laden real estate developer, which has been making a concerted effort to deleverage.

Oxley Holdings, run by PropertyGuru Property Report’s 2017 Singapore personality of the year Chiang Chiat Kwong, had been involved in a number of property disposal discussions over the past few months, following a spending spree last year that saw the developer’s debt levels soar. Earlier this month, Mingtiandi reported that Oxley intended to sell Chevron House at Raffles Place to US real estate fund manager AEW for S$1.025 billion, in a deal which is also in due diligence.

The developer’s attempts to sell its Stevens Road hotels also come after it had agreed in November to sell a leasehold interest in a Dublin mixed-use property for euros 106.5 million ($120.4 million). In January, the company sold another asset in the same Dublin project to US multi-family investor Greystar for euros 175.5 million ($198.4 million).

Setback in Liquidity Drive

According to local business publication The Edge Singapore, DBS Vickers Securities analyst Rachel Tan previously estimated that the sale of the Mercure and Novotel hotels would have reduced Oxley’s net debt-to-equity ratio, from 2.5 times (as at September 2018) to 1.8.

The proceeds from the hotel sale would also help solve some of the group’s urgent cash requirements, such as the looming repayments of its $$300 million and S$150 million retail bonds, due to expire in November and May 2020 respectively.

The Mercure and Novotel hotels on Stevens Road were opened in late 2017 and generate, according to Oxley, a recurring income of S$53 million per year at 83 percent occupancy. They are Oxley’s only Singapore hospitality assets, but it has hotels under development in Cyprus, Kuala Lumpur and Phnom Penh.

Update: This story updates a previous version which stated the previously agreed sale price for the properties as S$905 million. The story has been updated to show the correct figure of S$950 million.

Share this now

  • LinkedIn
  • Share
  • Tweet
  • Email

Filed Under: Finance Tagged With: CBRE Group, cm-sea, daily-sp, Hotels, JLL, JLL Hotels and Hospitality Group, Oxley Holdings, Singapore, weekly-sp

Leave a Reply

Your email address will not be published. Required fields are marked *

Get Mingtiandi Delivered

MTD TV

Warburg Pincus, Princeton Digital Foretell Asia’s Data Centre Future
MTD TV Interview with Jeffrey Perlman of Warburg Pincus Now Online

More MTD TV Videos>>

People in the News

Johnny Shao CPE
Asia Real Estate People in the News 2023-03-27
Jonathan Yap CapitaLand
Jonathan Yap Named CapitaLand Development CEO as Leow Retires Early
Grace Woo Chia-ching, executive director of CK Asset (Getty Images)
Asia Real Estate People in the News 2023-03-20
Eugene Kohn KPF
Asia Real Estate People in the News 2023-03-13

More Industry Professionals>>

People in the News

Asia Real Estate People in the News 2023-03-27

Johnny Shao CPE

Top level moves at European and Asian fund managers lead this week’s list of personnel changes from around Asia Pacific … Read More>>

Jonathan Yap Named CapitaLand Development CEO as Leow Retires Early

Jonathan Yap CapitaLand

Singapore property giant CapitaLand on Thursday announced the upcoming retirement of CapitaLand Development CEO Jason … Read More>>

Asia Real Estate People in the News 2023-03-20

Grace Woo Chia-ching, executive director of CK Asset (Getty Images)

Senior changes at developers in Hong Kong and mainland China lead this week’s review of personnel changes in Asia, with … Read More>>

Asia Real Estate People in the News 2023-03-13

Eugene Kohn KPF

The passing of a global architecture giant leads this week’s round of personnel updates on Mingtiandi, as KPF mourns the … Read More>>

More Industry Professionals>>

Latest Stories

Kathy Lee Colliers Hong Kong
Reopening Buoys Market as Hong Kong Home Prices Rise for Second Straight Month
Cross Street Exchange
Singapore Central Business District Office Rent Growth Slowed to 1% in Q1
Sunac Guangzhou
Sunac China Sweetens Offshore Debt Deal and More Asia Real Estate Headlines

Sponsored Features

TE Capital's Solitaire on Cecil
Pair of Floors Sold as TE Capital, LaSalle Launch Cecil Street Office Tower in Singapore
What Do Real Estate Investors Really Want?
Douglas Wu of Fairland
Fairland Creates Spark City Lifestyle Hub to Energise Hong Kong’s Cheung Sha Wan

More Sponsored Features>>

Connect with Mingtiandi

  • Facebook
  • LinkedIn
  • RSS
  • Twitter

Real Estate News

  • Capital Markets
  • 2022 Event Calendar
  • MTD TV Archives
  • People
  • Logistics
  • Data Centres
  • Asia Outbound
  • Retail

More Mingtiandi

  • About Mingtiandi
  • Contact Mingtiandi
  • Mingtiandi Membership
  • Newsletter Subscription
  • Advertise
  • Terms of Use
  • Privacy
  • Join the Mingtiandi Team


© 2007-2023 China Advertising Media Ltd (Samoa). All rights reserved.

  • This field is for validation purposes and should be left unchanged.