OUE in preliminary talks to sell site of The Parisian
http://www.businesstimes.com.sg/sub/...53270,00.html?
Published October 6, 2009
OUE in preliminary talks to sell site of The Parisian
Its shares fall 31% to close at $10 after company updates SGX on the move
By EMILYN YAP
OVERSEAS Union Enterprise (OUE) is considering the sale of 21 Angullia Park - a freehold residential site formerly known as The Parisian - which it bought en bloc for $228.1 million in 2007.
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Boom-time deal: OUE bought 21 Angullia Park en bloc for $228.1 million in 2007, when the property market was booming, and had plans to launch a condo on the site early last year. It has not launched the project so far
The company said yesterday it is 'engaged in preliminary discussions in relation to the possible disposal' of the site. It added that it is reviewing its overall financing strategy.
'As at the date of this announcement, there has been no agreement of definitive terms and there is no certainty that such discussions and review will proceed beyond preliminary stages or result in any transaction,' it said.
OUE was responding to a Singapore Exchange query on the counter's movement last Friday. OUE shares surged 57 per cent or $5.27 to close at $14.50 - a high not seen in more than a year.
After the update yesterday, the shares tumbled 31 per cent or $4.50 to $10.
OUE bought 21 Angullia Park near Orchard MRT Station when the property market - especially the high-end sector - was booming. Several developers were gunning for sites via collective sales.
The price of $228.1 million worked out to $1,735 per square foot per plot ratio (psf ppr) - a record on a psf basis for a while. This took into account an estimated $10.5 million development charge. Based on an earlier report, the breakeven cost for the project could be around $2,200 psf.
The company had plans to launch a luxury condominium - comprising mostly large units - on the site in early 2008.
But the financial crisis last year abruptly froze activity in the property market and the high-end sector was particularly hit.
So far, OUE has not launched 21 Angullia Park.
In August, the company posted a net loss of $47.8 million for the second quarter ended June 30. It said the weaker result was mainly due to the recognition of impairment losses of $52.2 million for two development properties, The Parisian and The Grangeford.
In June, OUE said its units had obtained a secured term loan for up to $300 million. The facility is secured by, among other things, first legal mortgages over 21 Angullia Park, 25 Leonie Hill, The Grangeford, fixed and floating charges over all present and future assets of the borrowers, and the assignment of insurance in respect of the properties.
The property market has been on the mend for the past few months. For instance, transaction prices at Four Seasons Park near 21 Angullia Park have been rising. A caveat was lodged in August for a 3,821-sq-ft apartment at $2,277 psf, whereas a unit of the same size went for $1,701 psf in February.
OUE sells 21 Angullia Park for $283m to China Sonangol
http://www.businesstimes.com.sg/sub/...27940,00.html?
Published October 23, 2009
OUE sells 21 Angullia Park for $283m to China Sonangol
By EMILYN YAP
OVERSEAS Union Enterprise (OUE) has sold its freehold residential site at 21 Angullia Park for $283 million, which will result in a profit of about $19.1 million.
The buyer is China Sonangol Land, a relatively unfamiliar name in the property market here. It is part of China Sonangol International, a Hong Kong- based group which also invests in oil, gas, minerals and reconstruction projects in Africa and Latin America.
According to CB Richard Ellis (CBRE), who brokered the deal, this could be the largest private residential land transaction since the $435 million sale of Westwood Apartments in 2007.
Formerly known as The Parisian, 21 Angullia Park has a site area of 49,113 square feet. The purchase price of $283 million works out to about $2,058 per sq ft per plot ratio (psf ppr).
CBRE estimates that this could lead to a breakeven price of $2,500-$2,600 psf and a selling price of around $3,500 psf, depending on when the site is launched.
OUE bought the site en bloc for $228.1 million in December 2006. According to CBRE investment properties executive director Jeremy Lake, the developer paid another $23 million as development charge and differential premium. It also incurred expenses for demolition and piling works, and in obtaining planning approval.
Based on OUE's June 30 financial report, the site was valued at $261.1 million. It has planning approval for a 36-storey project comprising 52 three- and four-bedroom units and two penthouses.
With the deal, China Sonangol will take over OUE's interest in its unit OUE (Angullia), which had a negative net tangible asset value of $24.4 million as at June 30.
China Sonangol will also take over $123.8 million in loans from OUE to OUE (Angullia). In addition, it will pay Standard Chartered Bank $164.5 million for the full discharge of OUE (Angullia)'s liabilities and the release of related security.
Assuming that the deal had been completed on Jan 1 last year, OUE's earnings per share for FY2008 would have been 31 cents, up from 21 cents.
'The transaction presents the group with an opportunity to review its financing strategy for its property development business segment by disposing of the Parisian and focusing its resources on the Grangeford, the larger of the two,' OUE said yesterday.
OUE bought The Grangeford through a $625 million collective sale in 2007. It said it intends to launch the site 'in due course', and would require funds to plan this development.
Meanwhile, the successful sale of The Parisian is a positive sign for the luxury property market here, CBRE's Mr Lake said. He understands there was at least one other overseas developer strongly interested in the site, and this shows that there are foreign players keen to participate in the market's pick-up.
Ngee Ann Polytechnic real estate lecturer Nicholas Mak noted that another potential collective sale site, Laguna Park, also drew interest from a foreign- owned company.
He reckoned these overseas firms could have profited from their markets and are looking for business opportunities elsewhere. With the launch of the integrated resorts (IRs) next year, these companies could be 'positioning themselves for the potential rally in the luxury sector next year'.
