SingHaiyi’s strategy to grow via acquisitions

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/ EdgeProp
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August 25, 2017 12:30 PM SGT
Celine Tang, wife of Chinese tycoon Gordon Tang, wears many hats. The mother of three was appointed group managing director of Singapore- listed property development and investment firm SingHaiyi Group in December 2013. Last August, Tang was also named executive chairman and CEO of Singapore-listed OKH Global, which focuses on the development of industrial and logistics properties.
Tang says SingHaiyi is in the midst of diversifying into commercial property
Originally from Shantou, a prefecture- level city on the eastern coast of Guangdong, Tang graduated from China People’s University for Police Officers, now known as People’s Public Security University of China, with a bachelor’s degree in Literature. Before joining her husband’s business, Tang had a flourishing career in the civil service, rising through the ranks and even serving as an assistant judicial officer of the Shantou Longhu District Court from 1990 to 1994.
What is little known is that the Tangs have been in Singapore since 1995, where they are now permanent residents. The Tangs have two sons and a daughter. The elder son, 21, is in Singapore’s national service. In Singapore, the Tangs started Tang Dynasty Pte Ltd in 1995, as a trading and investment company. They then invested $100 million to establish Haiyi Holdings in 2003 as an investment holding company, focusing on international trade and financial investments.
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Growth by acquisition
The Tangs were propelled into the spotlight in August 2012 when the former SingXpress Land, led by Chan Heng Fai, entered into a conditional agreement with Haiyi Holdings to subscribe for $94.4 million of cumulative convertible non-voting perpetual reference shares (NRCCPS). Following the conversion of the NRCCPS by Haiyi, the Tangs acquired a controlling interest of 62.2% in Sing- Xpress Land on Nov 27, 2012. Sing- Xpress Land was renamed SingHaiyi Group on March 12, 2013 to reflect the change in control of the company.
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Gordon then appointed Neil Bush as non-executive chairman of SingHaiyi in April 2013. Bush is the brother of Jeb Bush, former governor of Florida, as well as George W Bush, the 43rd President of the US. Their father, George H W Bush, was the 41st President of the US.
Bush and Gordon had been business partners in Oregon-based American Pacific International Capital, where the latter has been chairman since 2003. APIC owns and manages hotels such as Hotel Metropolis and Hotel Vertigo in California. It also owns other assets in Oregon, China, Hong Kong and Singapore.
Opportunistic play in the US
Having assumed a controlling stake in SingHaiyi, Tang purchased two distressed assets in the US. In September 2013, the company acquired Tri-County Mall in the northern suburbs of Greater Cincinnati at a 77% discount. The mall occupies a freehold 3.3 million sq ft site and has a net lettable area of 1.26 million sq ft. Macy’s department store owns and occupies 18% of the NLA. The mall is undergoing a rebranding and asset enhancement and will be transformed into a lifestyle mall, with a focus on F&B, fashion and entertainment.
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The second purchase of a distressed asset in the US by SingHaiyi was in November 2013, when it paid US$33.1 million for Vietnam Town, a partially completed commercial condominium project in San Jose, California. The freehold Vietnam Town is located in a mixed-use neighbourhood and consists of nine blocks with a total of 256 condo units. Sosold. SingHaiyi’s stake translates into 192 units in Vietnam Town. Most of the buyers are said to be Americans of Vietnamese descent, according to Tang. The project is slated for completion in 2H2017.
In February 2014, SingHaiyi acquired 5 Thomas Mellon Circle, an office building occupying a 204,300 sq ft freehold site in San Francisco Bay, California. SingHaiyi purchased the property from APIC for US$24.4 million, and plans to demolish it to build a 550-unit waterfront condo. The US$420 million ($571.7 million) project is expected to be completed in 1H2019.
Investing in listed entities
Besides making acquisitions in the US, Tang has also been busy in Singapore, purchasing stakes in listed real estate investment trusts such as Suntec REIT, OUE Commercial REIT, Ascendas Hospitality Trust and OUE Hospitality Trust.
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Even though Gordon is a non-executive director of SingHaiyi, he has a controlling stake in the listed entity through holding company, Haiyi Holdings.
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Before acquiring control of SingHaiyi, the Tangs had already been active in Singapore’s real estate market through their individual investments, buying condos and strata offices for rental income, including units in Suntec City Tower One. “We like it here in Singapore,” says Tang. “It’s a great place to raise a family and establish a business presence. It also offers good opportunities to invest in listed companies.”
Tang is now in the driver’s seat at SingHaiyi and the company successfully transferred from Catalist to the Mainboard of the Singapore Exchange on May 26. “I am happy that we are making progress,” she says.
Reputable developer
Tang wants to build the company into a reputable developer. One of the first developments undertaken by SingHaiyi was The Vales, a 517- unit executive condo located in Sengkang. It marked SingHaiyi’s maiden development — from site acquisition to project completion. SingHaiyi had won the government tender for the 99-year leasehold site in February 2014 with a bid of $192.9 million, or $367 psf per plot ratio (ppr). The group invited construction firm Kay Lim to be a partner in the project, and the latter took a 20% stake in the joint venture.
The Vales was launched in July 2015, and fully sold as well as completed this year. The project is located opposite Sengkang General and Community Hospitals, which is scheduled to open in 2H2018, and is also within walking distance of Compass One, a shopping mall integrated with the Sengkang MRT and bus interchange stations. The Vales won BCA Green Mark Gold Plus certification in 2016.
One of the first developments undertaken by SingHaiyi was The Vales, a 517-unit executive condo in Sengkang
Following the successful completion of The Vales, SingHaiyi has turned its attention to a legacy site at Balestier acquired en bloc by the former SingXpress Land in November 2010. Formerly called CosmoLoft, SingHaiyi has since renamed it City Suites. The 56-unit boutique freehold development contains mostly one-bedroom units with sizes ranging from 452 to 527 sq ft, and is scheduled for completion this quarter. According to Tang, many of the units overlook the greenery and heritage buildings of the Communicable Disease Centre.
The freehold City Suites is scheduled for completion this quarter
Diversifying into commercial development
SingHaiyi is in the midst of diversifying into commercial property, says Tang. For instance, it is part of the consortium that is redeveloping the former Park Mall into a Grade-A office building at 9 Penang Road. The consortium is made up of Suntec REIT (with a 30% stake), SingHaiyi (35%) and Haiyi Holdings (35%)
The new eight-storey commercial building at 9 Penang Road will have a total net lettable area of 352,000 sq ft when completed in 2H2019. There will also be a 15,000 sq ft retail component on the first storey. Tang says there are no other new office developments on Penang Road. Thus, she expects interest to come from MNCs that want a presence in the prime Orchard Road neighbourhood.
SingHaiyi is involved in the development of the former Park Mall into a Grade-A office building.
SingHaiyi is also actively looking to replenish its landbank. “This is our work as a developer. Even if we are not bidding, we must study the market so we can take advantage of any opportunity,” says Tang.
This article appeared in The Edge Property Pullout, Issue 794 (Aug 28, 2017) of The Edge Singapore.