The Zhou family from Shanghai who picked up an office block at 137 Cecil Street last year has bought a 60 per cent stake in the company that owns the next-door property at 139 Cecil Street.
The latest deal is said to value the 11-storey property at S$140 million. It is on a site with 99-year leasehold tenure starting Aug 20, 1981, which means the balance lease is around 64 years.
Written permission was granted last year by Urban Redevelopment Authority (URA) for a major refurbishment exercise to build additional floors, extending the block to 16 storeys.
BT understands that these works could cost about S$20 million. Prior to the latest transaction, the plan was to sell small strata office units although a sale of the entire refurbished asset on a turnkey basis is also possible.
The building is currently vacant.
The Zhou family has paid S$75 million for a 60 per cent stake in Ececil Pte Ltd, which owns 139 Cecil Street, to a joint venture between Vibrant Group and DB2 Group.
Vibrant, which is listed on the main board of the Singapore Exchange, announced the completion of the sale in a regulatory filing last week – though it did not identify the buyer as the Zhou family.
The Vibrant-DB2 joint venture continues to hold the remaining 40 per cent in Ececil. It acquired 100 per cent of Ececil in 2014 from Cheong Sim Lam in a deal that valued the office block at S$110 million.
BT understands that the major refurbishment, or “addition and alteration” works, will see the gross floor area (GFA) of the property increase from 68,809 sq ft currently to 88,886 sq ft; the latter figure is estimated to yield about 75,300 sq ft strata area.
Formerly named Cecil House and now known as DB2Land Building, the property has an estimated land area of 7,936 sq ft. The approved GFA for the addition and alteration works reflects an 11.2 plot ratio (ratio of maximum GFA to land area) – the same plot ratio stipulated under URA’s Master Plan 2014 for the commercial-zoned site.
Under the proposed refurbishment granted written permission by URA last year, there will be food and beverage use on the first storey, offices from the second to 14th floors and a mechanised car park from basement to the fifth storey. The 16th storey will have a communal roof terrace and F&B space.
The next-door property at 137 Cecil Street, which was once known as Aviva Building, is now named Hengda Building after the Zhou family’s Shanghai Hengda Group, which is involved in real estate and other businesses.
Late last year, the Zhou family acquired 137 Cecil Street by purchasing all the shares in the company that owns the 13-storey office block. That deal valued the freehold property at S$210 million and involved a leaseback arrangement with the seller, Mr Cheong. He had already spruced up the asset prior to the sale and went on to sign up tenants.
The building, which has around 67,550 sq ft net lettable area, is said to be substantially leased.
Mr Cheong, a member of the family that developed International Plaza in the 1970s, gained control of the two adjacent buildings from Yi Kai Group and Fission Group shortly after the duo teamed up to acquire the two properties in July 2009 for S$100.80 million.
It is not known how much Mr Cheong paid Yi Kai and Fission; the transaction was also through a sale of shares.
Mr Cheong secured URA’s provisional permission in 2010 to redevelop the two office blocks into a new residential project with 227 apartments but never proceeded with the redevelopment project.
Adapted from: The Business Times, 23 September 2016