Singapore Companies
Published October 4, 2006

Chip Eng Seng, Lehman in JV for West Coast project


CONSTRUCTION and property company Chip Eng Seng Corporation will team up with a Lehman Brothers' investment vehicle to develop a residential project on the former Westpeak condominium site in West Coast in a 50/50 joint venture, the company said yesterday.

Chip Eng Seng, which started out as a construction company before expanding to property de velopment recently, announced that its property arm CEL Development has entered a joint venture (JV) agreement with WP Mauritius Holdings to develop the site, which Chip Eng Seng bought in April this year at a collective sale for $206.1 million.

WP is a wholly owned investment vehicle of Lehman Brothers Real Estate Partners II and its affiliated investment entities.

Under the JV agreement, the residential project will be developed through a joint-venture vehicle, CES-West Coast Pte Ltd. CEL and WP will each have a 50 per cent stake in the JV company.

In yesterday's announcement, Chip Eng Seng also said that another one of its wholly owned subsidiaries, Chip Eng Seng Contractors (1988) Pte Ltd, will be appointed as the main contractor to design and build the project.

The project is not expected to have a significant impact on the net tangible assets and earnings per share of Chip Eng Seng for the current financial year ending December 31, 2006, added the company.

The tie-up between Chip Eng Seng and Lehman Bro thers Real Estate Partners II is not the first. Earlier this year in July, the two companies announced that they were teaming up to build a high-end residential development in Cairnhill in another 50/50 joint venture.

This time around, the West Coast development is expected to be mid-tier. The site has an area of 311,829 square feet, making it the biggest freehold collective property in terms of land area to be transacted in recent years.

When it bought the site in April, Chip Eng Seng said it could redevelop the site into a new project with about 545 units averaging 1,200 sq ft.

Chip Eng Seng's shares closed 2.5 cents higher at 27.5 cents yesterday.