Viva Land-linked units put Singapore assets up for sale for about S$700m

Citi Commercial Pte Ltd

THE Robinson Point office building and the hotel next door (formerly known as SO/ Singapore) have been put on the market.

Entities in the Viva Land Group - now known as VivaCapital - which own the assets have appointed CBRE and JLL as marketing agents to source for buyers through an expression of interest (EOI) exercise.

A spokesperson for VivaCapital confirmed this when contacted by The Business Times (BT).

Talk in the market is that the EOI will close in early February. VivaCapital is open to receiving offers from potential buyers keen on buying just one asset, or both.

The indicative pricing for Robinson Point, a 21-storey freehold office building, is understood to be about S$470 million. This is below VivaCapital’s acquisition price of S$500 million; that deal was entered into in 2020 and completed in 2021.

For the adjacent hotel, now known as Hotel Telegraph, the indicative price of S$240 million is what VivaCapital paid for the asset in 2022. The balance term for the hotel’s site lease currently is about 48 years.

The VivaCapital spokesperson also confirmed that an entity linked to the group has sold three adjoining shophouses at 33, 35 and 37 Tras Street this month. BT understands that the shophouses were sold for S$29 million, less than the S$33.8 million VivaCapital paid for them last year. The shophouses are on a single land lot with 99-year leasehold tenure from April 1994, leaving a balance term of about 70 years.

VivaCapital’s moves to sell its Singapore properties come in the wake of the October 2022 arrest in Vietnam of Truong My Lan, the billionaire businesswoman whom some in business circles suggest is linked to Viva Land Group.

The Chinese-Vietnamese billionairess, the founder of Ho Chi Minh City-based Van Thinh Phat Group, was detained over suspected financial fraud.

Previously, officials of the group formerly known as Viva Land have denied any connections between the group and Truong. This was reiterated by VivaCapital’s spokesperson on Thursday (Jan 19). “Madam Truong My Lan has never had a connection with any operations of Viva Land or VivaCapital in Singapore. She was a business partner in selected projects in Vietnam but never became part of the company in any way.”

She added that VivaCapital has shared with its property agents that its consideration to divest the three Singapore assets is “not associated with any problems in operations as our assets continue to perform within expectations”.

On the decision to sell the three properties within short holding periods, the spokesperson said: “We were approached by several potential buyers. We are of the view that with rising interest rates and uncertainty in the key markets, global economic growth seems to be slowing down. Inflation is also becoming a huge concern... .

“These downside risks have been flagged as a concern by our stakeholders, which led us to consider this route. We take the view that if there is a right buyer, we could consider a divestment opportunity before the economy slows down further.”

Market watchers note that VivaCapital’s Singapore entities cannot be traced back to Truong.

Via searches on the Handshakes portal, the furthest that the three Singapore-incorporated vehicles that own the three respective assets can be traced back to is a British Virgin Islands-incorporated company, One South Bay Group Company Limited.

Chen Lian Pang, the former CEO of CapitaLand Vietnam, is the sole director of a string of Viva Land entities incorporated in Singapore. His LinkedIn profile shows he has been the chairman of Viva Land Investment & Development Holdings JSC in Vietnam since August 2020.

According to property title and company information searches, the purchases of Robinson Point and SO/ Singapore hotel were financed by Bank of East Asia.

Market observers said VivaCapital’s ultimate shareholders would be seeking to recover as much of their funds as possible after loan repayments, and as soon as possible.

Analysts say that potential buyers of Robinson Point and/or Hotel Telegraph would prefer to acquire the assets directly rather than via shares in the respective company that owns each asset, as that would involve taking over liabilities of the entity. “However, a direct asset purchase would entail payment of 3 per cent stamp duty, increasing the acquisition cost for intending buyers. If they were to buy shares in the company that owns the asset, they would pay stamp duty of only 0.2 per cent of the company’s net asset value,” said an analyst.

VivaCapital’s purchase price for Robinson Point worked out to S$3,721 per square foot (psf) on the existing net lettable area, making it the highest rate fetched for an entire office building in Singapore. VivaCapital bought Robinson Point from Tuan Sing. Market watchers have suggested the record price probably took into account the property’s redevelopment potential. 

The S$1.8 million per key that VivaCapital paid Royal Group last year for the SO/ Singapore set a new benchmark in per-room pricing for the Singapore hotel market. 

The purchase was seen by the market as riding on the redevelopment potential of Robinson Point under the government’s CBD Incentive Scheme.

In May last year, VivaCapital highlighted “we see several possible synergies between both properties considering a potential redevelopment of Robinson Point”.

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