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Thread: HPL, foreign fund set to buy Horizon Towers for $500m

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    Default HPL, foreign fund set to buy Horizon Towers for $500m

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    Published January 23, 2007

    HPL, foreign fund set to buy Horizon Towers for $500m

    If deal goes ahead, it will be the biggest en bloc sale yet in dollar terms

    By KALPANA RASHIWALA


    (SINGAPORE) A partnership involving Hotel Properties Ltd (HPL) and a foreign property fund is said to have conditionally agreed to buy Horizon Towers at Leonie Hill for $500 million, say sources.



    Horizon Towers: The site can be redeveloped into a condo with about 375 units averaging 1,800 sq ft each


    If the deal proceeds, it will mark the biggest collective sale yet, in dollar terms.

    The price reflects a unit land price of about $810 to $820 per square foot of potential gross floor area inclusive of an estimated $45 million to $50 million lease upgrading premium to top up the 204,742 sq ft site's lease to 99 years from a remaining term of about 71 years.

    No development charge is payable.

    The site can be redeveloped into a new condo with a plot ratio of 3.2828. This means the site can be redeveloped into a condo with a gross floor area of more than 670,000 sq ft - sufficient for about 375 units averaging 1,800 sq ft.

    The break-even cost for a new upmarket condo project on the site could be about $1,350 psf, some market watchers reckon. The tender for the site closed in August last year without takers at the $500 million reserve price set by owners. However, around the turn of the year, HPL is said to have sprung into action with an offer. The sprawling leasehold property, set on elevated ground near Grange Road, is currently home to 199 apartments and 11 penthouses in two towers.

    Market watchers say HPL has been stirring from a long slumber of late.

    In April last year, HPL bought Beverly Mai on Tomlinson Road through a $238 million collective sale, working out to $1,184 psf per plot ratio inclusive of an estimated development charge of $16.8 million. And just last week, it bought out its partners in the Forum building on Orchard Road, setting the scene for a redevelopment of the property as well as HPL's adjoining properties, including the Hilton hotel.

    In March last year, HPL attracted a new major shareholder when Wheelock Properties (Singapore) bought a 21 per cent stake from GuocoLand.

    Market watchers say they would not be the least bit surprised if Wheelock were to team up with HPL for some of the latter's property development ventures, given the chemistry between the chiefs of the two companies - David Lawrence and Ong Beng Seng.

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    Default Re: HPL, foreign fund set to buy Horizon Towers for $500m

    Why is it that no development charges is payable?

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    Default Re: HPL, foreign fund set to buy Horizon Towers for $500m

    Quote Originally Posted by Madeira
    Why is it that no development charges is payable?
    Yes.... why?

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    Default Re: HPL, foreign fund set to buy Horizon Towers for $500m

    Ok. I managed to find some info on circumstances that development charge is not needed. See:
    www.ura.gov.sg/dc/brochure-devtcharge.pdf

    But I must say that the explanation and example used are not clear enough for layman.

  5. #5
    citizen x
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    Default Re: HPL, foreign fund set to buy Horizon Towers for $500m

    Quote Originally Posted by Madeira
    Ok. I managed to find some info on circumstances that development charge is not needed. See:
    www.ura.gov.sg/dc/brochure-devtcharge.pdf

    But I must say that the explanation and example used are not clear enough for layman.
    Thanks!


    Last edited by citizen x; 24-01-07 at 18:14.

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