Chip Eng Seng To Buy Minority Stake In AXA Tower
SINGAPORE – Real estate firm Chip Eng Seng Corporation is purchasing a minority stake in AXA Tower along 8 Shenton Way for S$2.1 million, reported The Business Times on Tuesday morning (5 April, SGT).
In particular, its fully-owned unit CEL Shenton has signed a share purchase deal with the vendors to buy 21 percent of the issued share capital of PRE 13, which holds an effective interest of 50 percent in the mixed-use commercial property.
Upon completion of the transaction, which is expected to be concluded by the end of April, CEL Shenton will own an effective stake of 10.5 percent in AXA Tower.
Under the signed agreement, CEL Shenton has pledged to commit up to S$251 million in loans for the property’s redevelopment and funding needs. This is in addition to other commitments.
AXA Tower is an iconic Grade A office building with a retail podium. It stands on a piece of land measuring 10,984 sq m and with a 99-year leasehold tenure with effect from 19 July 1982.
Chip Eng Seng disclosed that the property will be redeveloped into a mixed-use commercial and residential project consisting of office space, as well as retail, hotel and resident components. But this is subject to relevant government approval, including approval to refresh the lease to 99 years.
If the redevelopment proceeds, the property will have a maximum allowable gross floor area (GFA) of 144,162 sq m and a gross plot ratio of 13.125.
Notably, AXA Tower is owned by Perennial Shenton Property, which is in turn held by Perennial Shenton Holding. PRE 13 and Alibaba Singapore Holding each hold a half-stake in Perennial Shenton Holding.
The other shareholders of PRE 13 include Wilmar International subsidiary Piermont Holdings, Perennial Singapore Investment Holdings, and HPRY Holdings, which is owned by a director and controlling shareholder of Perennial Holdings, Kuok Khoon Hong. These stockholders will continue to hold a majority stake in PRE 13, which works out to a 29 percent effective stake in the property.
In a separate announcement, Perennial disclosed that the equity consideration for the deal was based on an agreed asset value of S$1.7 billion for AXA Tower. The commercial property’s preliminary redevelopment works have already started and are expected to be finished by 2028.
Perennial is anticipated to provide asset management and property management services upon the completion of the works in AXA Tower.
