CDL unit exits entire interest in Summervale Properties for S$977.6 million

Published Fri, Oct 21, 2016 · 12:34 AM
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CITY Developments Limited (CDL), through its wholly owned subsidiary Sunmaster Holdings, has entered into an agreement to exit its entire interest in Summervale Properties, which owns Nouvel 18, a 156-unit luxury, freehold residential development on Anderson Road, for S$977.6 million.

CDL said that it has unlocked value in Nouvel 18 through its third Profit Participation Securities (PPS) platform.

It will not hold any interests in the ordinary shares and preference shares in Summervale post completion of the transaction.

CDL's wholly owned subsidiary, Trentwell Management, will be appointed as the exclusive asset manager and marketing agent (for five years with an option to extend to seven) to manage, lease, market and sell the units of Nouvel 18. Trentwell will receive an incentive fee after a performance benchmark is met.

CDL said: "The benchmark ensures that Summervale will have funds to first repay the senior loans and notes, and then redeem and deliver the annual 5 per cent internal rate of return on the PPS. After the benchmark is fulfilled, Summervale will pay a portion of any excess as the incentive fee for Trentwell, and the remainder will be distributed to Green 18."

The latter is a special purpose vehicle company whose shareholders are high net worth Singaporeans and companies wholly owned by Singapore citizens, to which the PPS will be issued in the form of ordinary and preference shares to.

CDL executive chairman Kwek Leng Beng said: "CDL's third PPS is in line with our strategy to grow our funds management business. It is also our first funds management platform where the asset is a purely high-end residential project."

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