Teo encounters in Australia

By
/ EdgeProp Singapore
|
June 28, 2019 2:00 PM SGT
Teo Hong Lim, executive chairman and CEO of Roxy-Pacific Holdings, was surveying a 14-storey, freehold commercial building at 117 Clarence Street in the CBD in Sydney, Australia, one day in late-2015, when he bumped into fellow Singaporean and developer Terence Teo, director of family-owned Tong Eng Group. Incidentally, the latter was also eyeing the same building.
Instead of going head-on with each other, they decided to join forces to purchase the property for A$81 million in a 50:50 split. That was in December 2015. Just 2½ years later, the joint-venture partners sold the property for A$153 million, or 89% higher, in August 2018. “This is a one-off thing; you can’t make that kind of return all the time,” says Teo Tong Lim, group managing director of Tong Eng Group and father of Terence Teo.
The building at 312 St Kilda Road was purchased for A$74.1 million by Roxy-Pacific and Tong Eng in a 45:55 joint venture (Credit: Tong Eng Group)
In November 2017, Roxy-Pacific and Tong Eng also purchased a freehold building at 312 St Kilda Road in Southbank, near Melbourne’s CBD, in a 45:55 joint venture. The purchase price of the building was A$74.1 million. The freehold building is mixed-use, and contains a conference centre, apartments, offices and basement carpark.
The latest joint purchase by the duo was the NSW Aboriginal Land Council’s building at 33 Argyle Street in Parramatta, Sydney, for A$40.8 million last November. Tong Eng Group holds a 60% stake in the property, with Roxy-Pacific holding the balance 40% stake.
“We feel we need to adopt a cautious approach when we venture overseas. So, we look for buildings that offer good yields,” says Roxy-Pacific’s Teo.
The NSW Aboriginal Land Council’s building at 33 Argyle Street in Parramatta, Sydney, was purchased by Tong Eng and Roxy-Pacific in a 60:40 joint venture for A$40.8 million last November. (Credit: Tong Eng Group)
On top of yields, the property at 33 Argyle Street has potential for redevelopment in the future, adds Tong Eng’s Teo. The building is located across the road from the A$3.2 billion Parramatta Square development by Walker Corp. It will be the biggest commercial office development in...