SINGAPORE (Feb 26): An agreement between Hongkong Land and Malaysia-listed IOI Properties Group to jointly own and develop a prime land parcel in Singapore’s Marina Bay financial district could be in trouble.

Sources say the deal could be facing setbacks as some conditions precedent remain pending, according to The Edge Malaysia. In addition, it reports that the process of obtaining longer-term financing could have also hit a snag.

In June 2017, Hongkong Land and IOI Properties had penned an agreement for a proposed partnership to transform the 1.1-hectare Central Boulevard site into a project comprising two office towers of about 1.26 million sq ft of leasable space and a 30,000 sq ft retail podium.

IOI Properties’ wholly-owned subsidiary, Wealthy Links, had put in a winning bid of $2.57 billion for the Central Boulevard site that was tendered out under Singapore’s Government Land Sales Programme.

Upon completion of the proposed joint venture structure, IOI Properties was to hold 67% of the joint-venture company while Hongkong Land, a member of the Jardine Matheson Group, would hold the remaining 33%.

The announcement of the joint venture was made almost three months after IOI Properties completed a rights issue that reportedly raised more than 2 billion ringgit ($650 million) proceeds.

In its prospectus for the rights issue, IOI Properties revealed its plan to start work on the Central Boulevard site at the end of 2017 or in early 2018.

According to IOI Properties’ announcement to Bursa Malaysia in Nov 2016, Singapore’s Urban Redevelopment Authority (URA) requires successful land tenders to complete their proposed developments within 84 months.

Should any tender conditions be breached — including missing the completion deadline — the URA may repossess the land, and any payments made to the URA may also be forfeited.

This story, written by Stanislaus Jude Chan for The Edge Singapore, first appeared on Feb 26.