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16-02-14, 22:29
SECOND Chance Properties is hoping to sell the bulk of its property holdings in Singapore as its management believes the real estate market here is slowing.
The company has entered into an option deal to sell 45 properties, including*commercial*units at*Sim Lim Square,*City Plaza*and*Sunshine Plaza, for $175.4 million.
Founder and chief executive of Second Chance Properties Mohamed Salleh Marican told The Straits Times that every property class in Singapore seems to be coming off its peak price levels.
He said tough new loan conditions imposed last year have made it difficult for people to buy assets, and the situation is likely to worsen with mortgage rates set to rise.
"The property market most likely will go down, sooner or later. The possibility of the property business going up is much lower," he said.
Other property bosses have also expressed concerns at the slowing market, with lower volumes and a fall in prices.
City Developments executive chairman Kwek Leng Beng last week called on the Government to consider tweaking some of its cooling measures "as the property market starts to cool".
Concerns about the sector's dimming prospects have prompted Second Chance to look at selling the bulk of its assets here.
The company announced last week that it has agreed to enter into an option agreement to sell the properties to Celestine Management.
Celestine Management is the proposed property fund manager of a real estate investment trust (Reit).
It intends to buy the assets as part of its strategy to build a portfolio of properties with the aim of listing them as a Reit on the Singapore Exchange (SGX).
The proposed sale price for the properties is $40.6 million above the $134.8 million total market value of the properties.
Second Chance stated in last week's SGX announcement that "the board thinks that it is prudent to significantly reduce the group's exposure to its investments in properties".
It added that the chance to sell the properties en masse is a rare one, making it easier than to sell each property individually.
It plans to use 39 per cent of the proceeds to repay debts, with 55 per cent to be redeployed to other business opportunities and roughly 6 per cent to be distributed as dividend.
The deal is subject to regulatory and shareholder approval, particularly in Celestine Management's ability to list the Reit.
Mr Mohammed Salleh said the company will still hold some 16 properties here valued at about $80 million.
"This is an unsolicited offer. They approached us to buy all our properties, but there was no agreement on valuations for some of the properties," he said.
Asked about the pullback from the property market here, Mr Mohammed Salleh said: "From a business point of view, we feel this is the right thing to do."
Besides property, Second Chance is engaged in the business of securities investment as well as the retailing of apparel and gold.
The company has entered into an option deal to sell 45 properties, including*commercial*units at*Sim Lim Square,*City Plaza*and*Sunshine Plaza, for $175.4 million.
Founder and chief executive of Second Chance Properties Mohamed Salleh Marican told The Straits Times that every property class in Singapore seems to be coming off its peak price levels.
He said tough new loan conditions imposed last year have made it difficult for people to buy assets, and the situation is likely to worsen with mortgage rates set to rise.
"The property market most likely will go down, sooner or later. The possibility of the property business going up is much lower," he said.
Other property bosses have also expressed concerns at the slowing market, with lower volumes and a fall in prices.
City Developments executive chairman Kwek Leng Beng last week called on the Government to consider tweaking some of its cooling measures "as the property market starts to cool".
Concerns about the sector's dimming prospects have prompted Second Chance to look at selling the bulk of its assets here.
The company announced last week that it has agreed to enter into an option agreement to sell the properties to Celestine Management.
Celestine Management is the proposed property fund manager of a real estate investment trust (Reit).
It intends to buy the assets as part of its strategy to build a portfolio of properties with the aim of listing them as a Reit on the Singapore Exchange (SGX).
The proposed sale price for the properties is $40.6 million above the $134.8 million total market value of the properties.
Second Chance stated in last week's SGX announcement that "the board thinks that it is prudent to significantly reduce the group's exposure to its investments in properties".
It added that the chance to sell the properties en masse is a rare one, making it easier than to sell each property individually.
It plans to use 39 per cent of the proceeds to repay debts, with 55 per cent to be redeployed to other business opportunities and roughly 6 per cent to be distributed as dividend.
The deal is subject to regulatory and shareholder approval, particularly in Celestine Management's ability to list the Reit.
Mr Mohammed Salleh said the company will still hold some 16 properties here valued at about $80 million.
"This is an unsolicited offer. They approached us to buy all our properties, but there was no agreement on valuations for some of the properties," he said.
Asked about the pullback from the property market here, Mr Mohammed Salleh said: "From a business point of view, we feel this is the right thing to do."
Besides property, Second Chance is engaged in the business of securities investment as well as the retailing of apparel and gold.