Mainland Developer Buying Singapore’s GSH Plaza for S$725 Mil

Fullshare Holdings, a Nanjing-based property developer known for it astounding share price performance, announced this week that it has entered into agreement to buy GSH Plaza, a prime office building in Singapore’s Raffles Place for S$725.2 million ($512 million).

The Hong Kong-listed firm has signed a binding termsheet with a consortium led by GSH Properties Pte Ltd, a subsidiary of Singapore-listed GSH Corporation Limited, to buy the company that controls the 28-storey commercial building in Singapore’s banking district.

The purchase of the circa 1992 building is the latest in a series of large-scale commercial deals in Singapore. For Fullshare, the transaction is part of a string of large-scale acquisitions by the mainland firm. The deal also comes soon after the little-known developer saw its stock price rise by more than 2.5 times during the past year, catapulting its owner into the ranks of China’s richest people.

Fullshare Pays Full Price for Raffles Place Asset

Fullshare, which already has real estate projects in Australia and Canada, is picking up the Singapore building with the intent of using at least some of GSH Plaza’s 252,135 square feet (23, 424 square metres) of net lettable area for its own offices. The deal values the available office units in the building at approximately S$2,900 per square foot.

Plaza Ventures, the holding company for GSH Plaza, is 51 percent owned by GSH Properties, along with an investment vehicle belonging to GSH chairman . TYJ Group, an investment vehicle of GSH chairman Sam Goi and Vibrant DB2, an investment vehicle of Vibrant Group Limited and DB2 Group.

The consortium had acquired the building in 2014 from Keppel Land and Alpha Investment Partners for S$550 million, when it was still known as Equity Plaza. The group had been refurbishing the 28-year-old building as part of a program to market office units on a strata title basis. The building currently has 259 strata office units and two floors of retail space. The refurbished building is expected to obtain is temporary occupation permit during the first quarter of this year, according to an account in the Straits Times.

Fullshare Continue Acquisition Streak

The Singapore commercial real estate transaction is the latest deal for billionaire Fullshare boss Ji Changqun, who was ranked by Forbes as China’s 25th richest man with a personal fortune of $4.3 billion.

Fullshare, which went public via a backdoor listing in 2013, has been an aggressive acquirer of assets following the stunning performance of the company’s thinly traded stock. Fullshare pulled off the biggest takeover deal in Hong Kong last year acquiring all of the issued shares of mainland wind power equipment maker China High Speed Transmission Equipment Group for HK$16.3 billion in September 2016.

Ji has been actively acquiring companies and real estate down under. Fullshare bought a chain of childcare centres in Australia for A$66 million in December, in addition to purchasing a Sheraton Hotel in Queensland and picking up the prestigious Red Hill Estate winery near Melbourne in April.

Singapore Deals Keep Coming

The deal for GSH Plaza is part of a burst of en bloc investment transactions in Singapore, as interest picks up in real estate assets in southeast Asia’s financial hub.

At the end of January Stanley Ho’s Shun Tak Holdings paid S$305 million ($216 million) to acquire a stake in TripleOne Somerset on Orchard Road from Singapore’s Perennial Real Estate Holdings and six other companies.

Also during January, an affiliate of Abu Dhabi sovereign fund ADIA invested $176 million in a Singapore joint venture with industrial developer Boustead, just weeks after CLSA Capital Partners bought a 35-storey office tower on 77 Robinson Road in downtown Singapore for $373 million.

Last year the Qatar Investment Authority bought Asia Square 1 in Singapore from Blackrock for $2.45 billion in one of the biggest commercial property transactions of last year.

These deals come as a surge of new buildings slated to open in 2017 puts downward pressure on the office rental market. Premium and Grade A office rents slid by 6.8 percent in the fourth quarter of 2016 compared to the same period last year, according to Colliers International, with many analysts predicting that the market for commercial rentals in the city may be bottoming out.