High Street Centre en bloc sale lapses as purchaser fails to cough up balance 1% initial deposit
By Cecilia Chow
/ EdgeProp Singapore |
High Street Centre is a 29-storey mixed-use development launched its fourth collective sale bid in May this year at $748 million (Photo: Samuel Isaac Chua/EdgeProp Singapore)
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The en bloc sale hopes of the owners at the strata-titled, mixed-use development High Street Centre were dashed when marketing agent Cushman & Wakefield (C&W) informed them last evening that the collective sale had lapsed.
The reason was that lawyers representing the majority owners, Legal Solutions LLC, had not received the balance of the 1% deposit nor the requisite stamp duty certificate from the buyer at the close of the business day on October 2. Hence, the collective sale committee could not file its application to the Strata Titles Board (STB) by the deadline.
"The purchaser had made a last-ditch effort to ask the STB for an extension as their funds were expected to land anytime from tomorrow till October 9," according to C&W in a note to the owners. "However, our en bloc timeline unfortunately ends today [October 2]."
In the proposed application to STB, the purchaser was listed as Transformation Development Pte Ltd. A company search shows that it is a Singapore-registered company, and its primary business is infrastructure, engineering, design and consultancy services.
Transformation Development is believed to be acting as a nominee for the actual purchaser, an offshore entity. According to Christina Sim, senior director of capital markets at C&W, the purchaser is a fund comprising a group of high-net-worth investors from the US, Europe, and India. "The purchasers, being new to the Singapore market, were unaware of the regulatory hurdles and the collective sale timeline and process," she says.
On August 7, C&W stated in a letter to the owners of High Street Centre that the purchaser's initial deposit of 1% or $6.78 million was due on July 31. The payment was delayed as the buyer "was subjected to heightened regulatory vigilance on fund movements".
High Street Centre is located at 1 North Bridge Road in the Downtown Core (Source: EdgeProp Landlens)
Consequently, the timeline was pushed back by four to five weeks to accommodate the time needed for the purchaser to remit their funds from the US, according to C&W. The new deadline was September 5.
As a gesture of sincerity, the purchaser had made token payments amounting to $1.2 million. Therefore, the initial deposit balance due was $5.58 million ($6.78 million less the $1.2 million token payment made). Now that the en bloc sale has lapsed, the payments made to date will be forfeited.
In addition to the balance 1% initial deposit, the purchaser had to pay $33.9 million in buyer's stamp duty by October 2, says C&W's Sim.
The purchase price for High Street Centre was $678 million, 9.4% below the reserve price of $748 million. More than 80% of the owners had signed the sale and purchase agreement at the lower price of $678 million: 85.31% by share value and 90.8% by strata area.
High Street Centre is a 29-storey mixed-use development at 1 North Bridge Road and sits on a 60,299 sq ft, 99-year leasehold plot with an allowable gross plot ratio of 7.72. It has a total gross floor area (GFA) of 466,085 sq ft. The site has about 44 years left on its lease.
Even at $678 million, High Street Centre would have been the largest collective sale deal in 2024 had it gone through.
The first collective sale was in 2019, and the latest round in May was the second collective sale attempt for the owners of High Street Centre.
Far East Shopping Centre's $908 million collective sale was aborted, and subsequent tender at a lower price of $850 million failed to secure the requisite 80% needed for the deal to go through by June 6 (Photo: Samuel Isaac Chua/EdgeProp Singapore)
However, High Street Centre is not the only big-ticket en bloc deal that was aborted this year. At the end of September 2023, Far East Shopping Centre received an offer of $908 million at the close of its collective sale tender. The buyer was Chinese steel tycoon Du Shuanghua of Bright Ruby Resources. However, the buyer walked away from the deal after failing to secure additional gross floor area under the URA strategic development incentive scheme.
CBRE, the marketing agent for Far East Shopping Centre, relaunched the property for sale by tender in April this year, with the tender closing in early May. An offer of $850 million from an Indonesian group was received. The price is about 6.4% below the previous offer of $908 million and 8.4% below the guide price of $928 million.
However, the collective sale committee needed 80% of the strata-titled owners in the 298-unit mall to agree to the sale by June 6, the submission deadline for STB approval. Over 60% of the owners had agreed to the lower offer by the close of the business day on June 5. Since it did not meet the requisite 80%, the offer lapsed.
The article has been updated to include comments by Christina Sim, senior director of capital markets at Cushman & Wakefield
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