Maxwell House Singapore Sold En Bloc for S$276.8 Million

Maxwell House Singapore Sold En Bloc for S$276.8 Million

The Fourth Site That Successfully Sold in 2021

Attractive Price with Good Location Always Draw the Most Attentions from the Developers

Maxwell House Singapore located at 20 Maxwell Road has completed a successful en bloc sale.

Subsidiaries of Hong Kong-listed Chuan Holdings, Chip Eng Seng and SingHaiyi have jointly won the en bloc tender for this commercial building at S$276.8 million.

The final price is 3.3% premium over the set reserve price of S$268 million.

However, this is still lower by 6.2% compared to the S$295 million reserve price when the property had launched its first tender and failed to attract any buyers at that price.

The 13-storey commercial property has a trapezoidal shaped island plot that offers views and access on all the four sides.

It was built in 1971 and has 99-year lease tenure that started in 1969.

As per the Master Plan 2019 of the Urban Redevelopment Authority, the site has been zoned for commercial use with a 4.3 plot ratio.

The joint tenderers are planning to seek URA’s approval to covert the site to a mixed-use development with plans for increasing the Gross Plot Ratio to minimum 5.6 and also the Gross Floor area to 21,746 square metres.

SingHaiyi in its latest exchange filing revealed that up to 20% of the GFA would be allocated for commercial use in the new development.

The joint tenderers are also planning to approach the Singapore Land Authority for a new 99-year lease in-principle approval.

It needs to be mentioned that the acquisition’s completion hangs on outline planning permission for rezoning from the Urban Redevelopment Authority.

This would also include top-up lease, the sale approval order as well as the lessor’s approval for development on the property.

In April Cushman & Wakefield, the appointed property consultant had in a statement revealed that URA has in-advice supported the use of this site for mixed-use commercial and residential purpose in September last year for the same GFA and GPR that the tenderers are seeking approval for.

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About the Joint Venture

The three tenderers had launched a binding MOU (Memorandum of Understanding) prior to bidding for this property.

They are soon expected to enter into a Joint Venture Agreement that would draw out the necessary shareholding structure for the functioning of the joint venture.

It is expected that property development business Chip Eng Seng’s parent company CEL Development shall have the highest stake in the joint venture at 40% while Chuan Investments and SingHaiyi Investments would share the remaining states equally at 30% each.

Chuan Investments was recently incorporated and is owned by Longlands Holding which itself is Chuan Holdings’ wholly-owned subsidiary.

As a part of the deal CEL Development, Chuan Investments and SingHaiyi Investments would contribute to the total purchase price of S$276.8 million corresponding to their share in the JV.

Apart from this the three companies would also be contributing equity and other financial contribution based on their share in the JV.

Singapore billionaire couple Celine Tang and Gordon Tang have controlling stakes in both Chip Eng Seng and SingHaiyi.

Hence, this deal would be categorized as interested person transaction for both these entities.

The couple have around 65% stakes in SingHaiyi and 36.31% stake in Chip Eng Seng.  Mrs. Tang holds the position of Managing Director at SingHaiyi and at the same time she also holds both the positions of non-executive chairman and the non-independent and non-executive director at Chip Eng Seng

Chip Eng Seng and SingHaiyi’s audit committees have evaluated the risks and the rewards related to this project and believe that these are in equal proportions to those for all the tenderer.

They also firmly believe in the fact that the terms of the MOU aren’t commercial and in no way prejudicial towards the minority shareholders at SingHaiyi.

On its part SingHaiyi Investments has stressed that shareholders’ approval isn’t required to push this deal forward and the risk proposition for SingHaiyi and CEL Development would be proportionate to their stake in the JV.

Chip Eng Seng in a separate statement has said that they are aware of Covid-19 pandemic’s prolonged impact and how it can raise the level of uncertainty and the firm strongly believes that they can manage their finances successfully and mitigate risks while partnering in JVs.

Chip Eng Seng also added that Chuan Investments has had a good track record with property development in Singapore and has earned well for its shareholders.

It needs to be noted that Tng Kay Lim founder and MD of Kay Lim Holdings owns one-third stake in Chuan Investments.

Yang Tse Pin also has another third of the shares at that Chuan Investments and his companies bring in years of expertise in building dormitories for foreign workers, student hostel and other such properties.

Mr. Yang is highly respected for his more than three decades of experience in the property market.

Maxwell House Singapore En Bloc All Details

Maxwell House Sold En Bloc Pinterest
  • Status: SOLD

  • Tenure: 99-year Leasehold

  • Land Size: 41,801 square feet

  • Gross Floor Area: 234,071 sq ft

  • Plot Ratio: 4.3
    mixed-use: 5.6 (Redevelopment)
    Hotel Use: 5.6 (Redevelopment)

  • Address: 20 Maxwell Road

  • Nearest MRT: Maxwell Station (2023)

  • District: 1

  • Marketing Agent: Cushman & Wakefield

  • Reserve Price: S$295 million (Previous)

    Reserve Price: S$268 million (2021)

    Sale Price: S$276.8 million

  • Date of Sale: May 2021

  • Buyer: JV (Chuan Holdings, Chip Eng Seng and SingHaiyi)

  • New Development: TBA

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