Singapore’s Ho Bee Land Takes on Proprium Capital with $242M Offer for Aussie Builder

With Australia already accounting for more than a third of business, Singapore property player Ho Bee Land on Wednesday made a A$390.7 million ($242.3 million) bid to add a local developer to its presence Down Under.

Ho Bee Land made a non-binding indicative offer of A$0.70 per share for the equity it does not yet own in ASX-listed residential property developer AVJennings, with the Singaporean company having recently built a 5.49 percent stake in the Aussie builder.

“The Proposed Transaction represents a good opportunity for the Group to enhance its scale and capabilities in Australia. The merged Australian business will have a stronger financial position, increased revenue potential, and enhanced business’ capability to compete on a national level,” Ho Bee Land said in a filing with the Singapore Exchange.

Ho Bee Land’s offer represents a 4.5 percent, or A$16.7 million, premium to a November bid from Australian developer Avid Property Group, a unit of US investment manager Proprium Capital Partners, with the two companies now seen competing for AVJennings’ 9,800-lot land bank.

Takeover Contest

Ho Bee Land acquired its 5.49 percent stake in AVJennings through a series of daily purchases by a local entity from 28 November – the same day that Avid announced its bid for the troubled developer – through 27 December last year.

Before Ho Bee Land mounted its challenge to Avid’s proposal, which had been in the works since July 2024, AVJennings’ board had expressed their “unanimous view” that the US investor’s deal offered shareholders an opportunity to realise their investment at a price significantly above historic trading levels.

In its filing to the Australian Stock Exchange following Ho Bee Land’s challenge, AVJennings stated that its board will review the competing proposal, which remains subject to conditions, including a unanimous recommendation by the Australian company’s board and completion of due diligence by the Singaporean firm.

Ho Bee Land and AVJennings have leadership ties spanning nearly two decades through former KPMG Singapore managing partner Bobby Chin, who joined AVJennings as a director in October 2005 and became a Ho Bee Land board member the following year.

The battle for AVJennings is not the first encounter between Ho Bee Land and Avid, with the US-backed firm in 2019 having bought out Villa World when Ho Bee Land was the then-ASX-listed developer’s largest shareholder. Ho Bee Land had responded to Avid’s initial offer by increasing its stake in the company, with Villa World’s shareholders eventually accepting Avid’s proposal, which led to the developer’s privatisation.

After the privatisation, former Villa World chief operating officer Michael Vindolac joined Ho Bee Land as its Australia CEO in February 2020.

Southern Future

Should Ho Bee Land’s buyout of AVJennings succeed, the Aussie developer’s pipeline of development projects across five regions in Australia and New Zealand is expected to boost the Singaporean developer’s future in what has become a core segment of its business.

In the first half of 2024, Ho Bee Land’s revenue grew 48 percent to S$230 million ($168.3 million), with its Australia arm being its largest source of revenue at S$88 million.

“We estimate that Australia property development makes up about 38 percent of Ho Bee Land’s H1 2024 revenue. While property development revenue is lumpy, over time, an increasing amount of revenue has been derived from Australia. While Ho Bee Land has been increasing its exposure to Australia, Ho Bee Land has not been active in replenishing its landbank in Singapore,” OCBC analyst Wong Hong Wei told Mingtiandi.

In March 2021, Ho Bee Land invested A$103.73 million to acquire two residential sites in Victoria state and one more in Queensland which are expected to yield a total of 1,197 residential units. Nine months earlier, the developer spent A$23.5 million to acquire two residential development sites in Queensland.

AVJennings’ operations in Australia also align with Ho Bee Land’s previous investment targets in the country. “Ho Bee Land has been focused on developing communities in Queensland and Victoria. We note this somewhat overlaps with AVJennings’ focus in the eastern states, South Australia, and New Zealand,” OCBC’s Wong said.

Ho Bee Land manages a portfolio valued at S$6.8 billion ($6 billion), comprising commercial and residential properties across Singapore, the United Kingdom, Australia, and China.

The company controlled by Singapore billionaire Chua Thian Poh has developed luxury residential projects on Singapore’s Sentosa island and suburban housing estates in Australia in addition to making a splash with its S$1.3 billion purchase of The Scalpel office tower in London just as the city’s office market headed downhill in early 2022.