[UPDATE] Chip Eng Seng, SingHaiyi Group and Haiyi Group buy 21% stake in 8 Shenton Way

By Felicia Tan / The Edge Singapore | April 5, 2022 10:05 AM SGT
8 Shenton Way (Photo: Perennial Holdings)
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SINGAPORE (EDGEPROP) - Chip Eng Seng and Sing-Haiyi Emerald have respectively entered into share purchase agreements to collectively acquire a 21% interest in the property at 8 Shenton Way (formerly known as AXA Tower). Gordon Tang and his wife Celine Tang are controlling shareholders of Chip Eng Seng, where Celine serves as the non-executive chairman. The Tangs also control Sing-Haiyi Emerald, which is a joint venture between SingHaiyi Group and Haiyi Holdings.
Map and overview of AXA Tower - EDGEPROP SINGAPORE
Map and overview of 8 Shenton Way
Chip Eng Seng, through its wholly-owned subsidiary CEL Shenton, and Sing-Haiyi Emerald are each purchasing a 21% stake in PRE 13, a subsidiary of Perennial Holdings, for a respective consideration of $2.13 million. PRE 13 holds a 50% stake in the building, with the remaining 50% stake held by Alibaba. Alibaba purchased the stake in May 2020 in a deal that valued the property at $1.68 billion. The equity consideration to be paid by Chip Eng Seng and Sing-Haiyi Emerald is based on the agreed asset value of $1.68 billion for the property.
The stakes in PRE 13 are being purchased from Kuok (Singapore), Shenton Circle, Imagine Properties, PE One (a subsidiary of Singapore Press Holdings) and Huatland Development. The consideration was negotiated on a willing-buyer and willing-seller basis and took into account the net asset value (NAV) of PRE 13 as at Feb 28. It also took into consideration the redevelopment potential of the property and the marketability of the new development.
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Under the SPA, CEL Shenton and Sing-Haiyi Emerald will each take over a proportionate principal amount of the shareholders’ loans granted by the sellers to PRE 13. The entities will also commit to contribute their proportionate shares of additional shareholders' loans required for the redevelopment of the property and other funding requirements. The acquisition by either CEL Shenton or Sing-Haiyi Emerald is not inter-conditional on the other.
Following the completion of the acquisitions, CEL Shenton and Sing-Haiyi Emerald will hold a total stake of 42% in PRE 13, translating into an effective interest of 21% in the property at 8 Shenton Way. The remaining 58% stake in PRE 13 will be held by the remaining shareholders: Perennial Singapore Investment Holdings, Piermont Holdings and HPRY Holdings. Piermont Holdings is a wholly-owned subsidiary of agribusiness group Wilmar International, while HPRY Holdings is wholly-owned by Kuok Khoon Hong, a director and controlling shareholder of Perennial. Kuok is also the chairman and CEO of Wilmar.
In a filing to the Singapore Exchange on April 5, Chip Eng Seng states the proposed acquisition will allow the company to acquire a meaningful stake in a prime real estate site located within the central business district (CBD). In addition, the company is able to participate in a large-scale redevelopment project, which is expected to be an iconic landmark within the CBD upon its completion.
The project will add to the pipeline of Chip Eng Seng’s property development projects in Singapore; the company will be able to mitigate its financial and execution risks through participating in a large-scale redevelopment project with other partners. (Check all latest Singapore property Market Trends)
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The property at 8 Shenton Way is a 50-storey office tower that sits on a total site area of 118,229 sq ft. It has a 99-year leasehold land tenure starting from July 19, 1982.
The property will be redeveloped into a mixed-use commercial and residential development, comprising office, retail, hotel and residential components, with a maximum allowable gross floor area of 1.55 mil sq ft and a gross plot ratio of 13.125. (Find Singapore commercial properties with our commercial directory)
Perennial Group is also expected to continue to provide property management and asset management services in respect of the property.
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