CDL and partners secure extra $1.2b; completion expected by 2016
THE landmark South Beach project being developed by City Developments (CDL) and Middle Eastern investors has secured a fresh injection of cash from banks and a
property developer from Hong Kong.
South Beach, which is designed by London-based architectural firm Foster & Partners, will house premium office space, luxury hotels, city residences and retail space. -- PHOTO: CITY DEVELOPMENTSCDL and its two joint venture partners - Istithmar, part of the Dubai World Group, and Elad Group - have disclosed that they have secured an extra $1.2 billion to develop the Beach Road project. It is opposite the Raffles Hotel.
The deal comprises an $800 million syndicated bank loan and $400 million in secured convertible notes.
About $205 million of the $400 million secured convertible notes will be subscribed by three investors associated with the Nan Fung group of companies, one of the largest privately held conglomerates in Hong Kong. The remaining $195 million will be taken up by a wholly owned subsidiary of CDL.
The two-year $800 million secured term loan is provided by a syndicate comprising DBS Group, United Overseas Bank, OCBC, HSBC and Sumitomo Mitsui Banking Corp.
The capital injection goes some way to allay concerns about the development of the project which must be completed by 2016, under the terms of an agreement signed with the Government.
Last year, construction was delayed by the developers who said they wanted to wait for construction costs to fall to more reasonable levels.
Yesterday, the South Beach project was said to be on track to be completed by 2016, with CDL taking a leading role in the development.
The project, designed by London- based architectural firm Foster & Partners, will house premium office space, luxury hotels, city residences and retail space.
Construction costs are 'expected to come down further, which will be to our advantage', said CDL executive chairman Kwek Leng Beng, adding that securing financing for South Beach showed the confidence of bankers and investors in the development's potential.
'We are pleased to welcome our new investors and look forward to leveraging on their extensive experience in property investment and development in North Asia,' said Mr Kwek.
'These partners and investors have extensive networks and can bring in business connections which will further value-add to the project.'
Ms Vivien Wai Wai Chen, chairman and managing director of Nan Fung Group, said: 'We have been looking for good investment opportunities to grow in the current challenging economic environment.
'The South Beach project presents a unique opportunity to work with renowned international investors who are leaders in their respective areas and provides a prominent platform for us to enter the Singapore market.'
Nan Fung Group's investment in the South Beach project highlights a growing trend of Hong Kong developers becoming more active players in Singapore.
Hong Kong's Sun Hung Kai Properties is jointly developing Ion Orchard with CapitaLand.
Ahead of the announcement yesterday, shares of CDL closed 14 cents, or 1.56 per cent, higher at $9.09. And the stock is up 42.7 per cent since the start of the year, compared with a 33.4 per cent gain in the benchmark Straits Times Index.
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