Friday, April 8, 2011

IOI Corp invests S$114.77m in JV for Singapore property devt

KUALA LUMPUR: IOI Corp Bhd is investing S$114.77 million in a Singapore property company which will develop premium office space, luxury hotel, high-end retail outlets and prestigious city residences along Beach Road in the island republic.

IOI Corp said on Friday, April 8 the land, measuring 376,295 sq ft (8.64 acres), had a leasehold tenure of 99 years.

IOI Corp said the investment would be via its unit, IOI Consolidated (Singapore) Pte Ltd, which had subscribed for a 49% stake in Singapore's Scottsdale PROPERTIES [] Pte Ltd for cash consideration of S$114.77 million.

Scottsdale owns 66.67% of South Beach Consortium Pte Ltd (SBC), which was incorporated to take part in a design tender for the piece of land along Beach Road under the Singapore Government land sale programme in 2007.

IOI Corp said SBC was successful in the tender and acquired the land for S$1.689 billion. As at Dec 31, 2010, SBC has total assets of S$2.02 billion and net assets of S$681.8 million,' it said.

'The acquisitions present an opportunity for IOI to be involved in an iconic development in Singapore downtown area with a sizeable mix of office, hotel, residential and retail components.

'The substantial size and location of the development which is in close proximity to such landmarks as Suntec City Convention Centre and Raffles Hotel will make this development one of the most popular and prominent mixed-use developments in downtown Singapore,' said IOI Corp.

The other shareholder in Scottsdale is Ascent View Holdings Pte Ltd, a unit of City Developments Ltd, which holds 50.1%.

IOI Corp said IOI Consolidated would advance S$27,730,499 to Scottsdale as a shareholder loan which was in proportion to its shareholding in Scottsdale upon the completion of the subscription.

IOI Consolidated and Ascent View might be required to contribute further equity in proportion to their respective shareholdings in Scottsdale (about S$500 million each) to acquire/redeem existing mezzanine notes earlier issued by SBC, for working capital requirements and to part finance the CONSTRUCTION [] of South Beach.

'The acquisitions will entail a total investment of up to S$816.8 million (equivalent to RM1.96 billion) by IOI Consolidated,' it said.

South Beach is a mixed use development land parcel bounded by Beach Road, Bras Basah Road, Nicoll Highway and Middle Road.'' IOI Corp said the total land area is 376,295 square feet (8.64 acres) and has a leasehold tenure of 99 years.

The development will comprise of premium office space, luxury hotel, high-end retail outlets and prestigious city residences.

'It is preliminary to ascertain the total development cost or expected profit from the development as SBC is in the progress of refining the design plans and undergoing value-engineering reviews to enhance South Beach's development efficiency and cost effectiveness,' it said.

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