Indonesian family in exclusive due diligence to buy 22 units at Draycott Eight: sources

Price being negotiated said to be nearly S$168 million or close to S$2,570 per square foot on a total strata area of 65,401 sq ft

Jun 10, 2022

A STACK of 22 apartments at the Draycott Eight condominium in prime District 10 could change hands.

The Business Times understands that an Indonesian family is in exclusive due diligence with a view to buying the units for a total of nearly S$168 million from US-based private equity group Angelo Gordon.

The price works out to slightly below S$2,570 per square foot based on a total strata area of 65,401 sq ft, say sources. Draycott Eight is a 136-unit condo on a site with a balance leasehold tenure of about 74 years. It received Temporary Occupation Permit in 2005.

Angelo Gordon’s 22 units comprise 21 four-bedroom apartments, most of which are around 2,900 sq ft each, and a duplex penthouse of 4,069 sq ft.

The units are fully leased and their rental income is said to reflect roughly 2.5 per cent gross yield on a price of S$168 million. Observers say there is potential for the units to fetch higher rents upon lease renewal, given the current tight leasing market for large, 4-bedroom units of about 3,000 sq ft and above in the posh Ardmore/Draycott location.

Michelle Lek of Quillion Global, a real estate investment advisory company serving ultra-high-net-worth clients, is understood to be acting for the buyer.

Angelo Gordon is believed to have bought the units for under S$2,000 psf in 2017 from a fund managed by Alpha Investment Partners.

Draycott Eight was developed by Wing Tai on a 99-year leasehold site that it clinched at an Urban Redevelopment Authority tender that closed in June 1997, just before the Asian Financial Crisis erupted.

Its winning bid for the plum site worked out to S$1,103.60 per square foot per plot ratio (psf ppr).

The project has 3 residential blocks of 24 storeys each and a distinctive clubhouse in a large black-and-white conservation bungalow.

In 2006, Wing Tai sold all 46 units in one of the blocks to Forum Capital Partners for S$214.92 million or S$1,572 psf on a total strata area of 136,716 square feet. The following year, Forum Capital sold the units to 2 funds managed by Morgan Stanley, with each fund picking up a stack of 23 units at an identical price of S$2,600 psf. The funds sold their respective stacks at different times, but in both cases at below their purchase price.

One of the funds sold its 23 units to a fund managed by Alpha Investment Partners in 2010 for S$2,300 psf or slightly more than S$157 million. In late 2012, the Alpha fund sold one of the units, a 4-bedroom apartment on the eighth floor, for S$7.18 million or S$2,480 psf, leaving it with the 22 units that it later sold to Angelo Gordon.

The other Morgan Stanley-managed fund divested its 23 units in 2015 for S$2,180 psf to a vehicle controlled by the family of Dennis Chiu, an executive director of Far East Consortium International of Hong Kong.

Angelo Gordon’s 22 units are expected to be transacted through a sale of shares in the company owning the units.

Market observers suggest that the buyer is unlikely to incur additional conveyance duty (ACD) akin to the additional buyer’s stamp duty for the purchase. Due to multiple layering in the existing holding structure for the asset involving Singapore as well as overseas-incorporated entities, the transaction may not fall under the existing provisions of the ACD legislation.

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