Chip Eng Seng Sells Aussie Hotel for $12M, Buys Out Maldives Project as Buyout Progresses

Celine and Gordon Tang chalked up three transactions in a week, including the sale of a hotel in Australia by Chip Eng Seng as the mainland billionaire couple bids to buy out the Singapore-listed builder.

Chip Eng Seng agreed to sell the 84-key hotel and restaurant asset in Mandurah, Western Australia to two units of Perth-based Acure Asset Management for A$18 million ($12.11 million), the company announced late Thursday.

The disclosure came on the heels of Chip Eng Seng’s acquisition of a 30 percent stake it does not already own in a Maldives five-star resort development project. The developer said it will pick up the stake from an affiliate of local firm Amin Construction in order to have full control of the lagoon project.

Also last week, the developer’s chairman, Celine Tang, paid S$2.5 million to raise her stake in Singapore-listed Suntec REIT to 8.05 percent from 7.98 percent. The string of transactions occurred as the Tangs’ sweetened offer to privatise Chip Eng Seng at a value of more than S$588 million turned unconditional last week, which extended the closing date by two weeks from the original schedule on 5 January.

Checking Out of Aussie Hotel

Chip Eng Seng is selling The Sebel Mandurah, a seven-storey waterfront property located at 1 Marco Polo Drive in the city south of Perth, at a price that works out to A$214,286 per key. The property comprises a 4.5-star hotel across five levels and two floors currently leased to a restaurant operator.

The firm is disposing of the property and its operations at a 20 percent gain from the A$15 million it paid to buy the property in 2017, and a 22.4 percent markup compared to the asset’s book value of A$14.7 million as of 30 November.

“The proposed disposal will allow the group to recycle the capital arising from the net proceeds of the sale for its working capital purposes and/or to pursue opportunities which have better upside potential in terms of yield and/or capital appreciation,” Chip Eng Seng said, noting that the transaction is unlikely to have a material impact on the assets and earnings of the company.

The Sebel Mandurah is less than an hour’s drive from Perth Airport with a view overlooking the city’s Mandjar Bay.

All-in on Maldives Resort

Across the Indian Ocean in South Asia’s Maldives, the firm announced early last week that it is taking full control of a project to build a five-star resort in North Male Atoll called the Lagoon. Chip Eng Seng bought out the 30 percent stake from its former joint venture partner, Tropical Developments Pte, an affiliate of local construction firm Amin Construction, which handles projects from resorts to residential and office buildings.

Chip Eng Seng is paying $1.32 million in cash for the shares while assuming the entire $3 million debt extended by Tropical Developments to the JV. The buyout will allow the company to manage the project more efficiently, it said, especially now that the firm has adequate financial resources to proceed with the development alone.

The soon-to-rise resort is being developed on a site with a 50-year leasehold starting from August 2016. The company has yet to issue a timeline for the project, which is located around 20 minutes away from the capital city of Malé by speedboat.

Following the back-to-back announcements, shares at the firm remained steady at S$0.76 each on Friday from its price at the start of the week. The price, however, declined slightly on Monday to S$0.75 apiece.

Tangs Work on Buyout

Chip Eng Seng is currently being bought out by the Tang couple through a take-private offer valuing the company at S$588 million. The couple’s ownership in the firm hit 56.63 percent on Monday, with roughly five weeks left before the offer closes on January 19.

This will mark the couple’s second SGX-listed company to be taken private in a year, after they took full control of local builder SingHaiyi Group in January through an all-cash S$493 million deal.

The couple’s companies have been teaming up on major development projects in Singapore, including the 21 percent stake that Chip Eng Seng, SingHaiyi and Haiyi Holdings – an investment firm run by the couple – jointly own in a S$1.7 billion redevelopment project at 8 Shenton Way.

The companies are joining local developer Perennial Holdings, mainland tech giant Alibaba and others in the project, which will mark the Lion City’s tallest skyscraper upon completion.

Upping Suntec REIT Stake

Aside from Chip Eng Seng, the Tang couple have substantial shareholdings in a number of other SGX-listed property firms, including Suntec REIT. Celine Tang upped her stake in the REIT last week, adding 1.78 million shares worth S$2.49 million to raise her units held to 231.4 million.

Her family is also among the biggest investors in the trust managed by Hong Kong logistics giant ESR. Suntec REIT’s most recent annual report shows that Gordon Tang holds 234.2 million units as of March 1, while their son, Jialin Tang, has 199.2 million units in a joint account with Gordon’s mother, Yang Chanzhen.

Adding to her chairmanship at Chip Eng Seng, Celine Tang is also OKH Global’s executive chairman and chief executive currently, with the couple jointly owning a 44.3 percent interest in the Singapore-listed developer through Haiyi Holdings, as of mid-September.

Gordon Tang also maintains an 8.3 percent stake in SGX-listed OUE Commercial REIT, with his wife holding a 6.48 percent share, while their son has a 5.08 percent stake as of March 2022 according to its latest annual report. The Tang family are also the second-largest shareholders in SGX-listed Cromwell European Real Estate Investment Trust with just over a 9 percent stake, according to public documents.