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137 CECIL STREET SOLD TO SHANGHAI BUYER

posted Aug 5, 2015, 12:49 AM by Benjamin Ng
Estimated pricing to be above S$200m, buyer had previously shown interest in 158 Cecil Street, 112 Robinson Rd

A very likely second transaction of an office block in the space of 6 weeks is about to be strike, the sale of 137 Cecil Street reported reliable sources.  

The deal is said to be through the sale of shares in the company that owns the freehold building.  Details of pricing are uncertain yet, but its understood that seller Mr. Cheong Sim Lam have asked for S$220 million.

Talk in the market is that about a month ago, the price was negotiated to be around S$210 - S$215 million. The deal may involve some structuring, like a rental guarantee.

The buyer was said to be a Chinese Businessman with surname Zhou from Shanghai who may want to establish a presence in Singapore.

He had earlier looked around 158 Cecil Street, 112 Robinson Rd before turning back to 137 Cecil Street.

Mr. Cheong has done some A & A works on the property previously known as Aviva Building and is now looking for tenants. The net lettable area is 67,550 sq ft, with typical floor plates of about 4800 - 5700 sq ft.

It was said that a few tenants have been secured. The Urban Development Authority has granted a written permission in July 2015 for 2 units on the first level to be used as restaurants. Just the same month, it had also granted temporary permission to use the 3rd level as function rooms.

Last year June, Mr. Cheong sold the next-door Cecil House, at 139 Cecil Street, to a joint venture between Vibrant Group and DB2 Group. It was valued that the transaction of the 11-storey block with balance lease term of 66 years at that time to be at S$110 million. 

Based on earlier reports, Mr. Cheong gained control of the 2 adjacent buildings from Yi Kai Group and Fission Group shortly after the duo teamed up to acquire the 2 properties in July 2009 for S$100.8 million. They paid S$35,8 million for Cecil House and S$65 million for the former Aviva Building.

Market watchers could not confirm the price Mr.Cheonghad then paid Yi Kai and Fission as that transaction was through a sale of shares.

In June 2010, when Urban Redevelopment Authority granted provisional permission to redevelop the 2 properties into a new residential project with 227 apartments, Mr. Cheong's name was already listed as the sole shareholder of the company that was granted approval.

However, Mr. Cheong never proceeded with the redevelopment project. He is a member of the family that developed International Plaza.

The sale of 137 Cecil Street comes soon aftert he S$240 million purchase of 158 Cecil Street in late June.  Low-profile investor Denis Jen, who owns shopping malls in Australia, picked up the 14-storey building from a fund manged by Alpha Investment Partners, the fund management arm of Keppel Land.

The price worked out to be about S$2,100 psf based on the property's net lettable area of around 115,000 sq ft. 158 Cecil Street is on a site balance lease term of about 65 years.

Formerly known as The Spazio and Dapenso Building, the property underwent a major revamp several years ago.

Credits: The Business Times
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