CDL and Keppel's Alpha Investment in S$1.1b Singapore office venture

Published Tue, Dec 15, 2015 · 10:14 AM

CITY Developments (CDL) has entered into a deal with Alpha Investment Partners, Keppel Land's property fund management arm, to create a joint office investment platform via its second Profit Participation Securities (PPS) transaction.

This platform will acquire three of CDL's prime office assets with a total value of about S$1.1 billion. The three assets are: Central Mall (Office Tower) for S$218 million; 7 & 9 Tampines Grande for S$366 million; and Manulife Centre for S$487.5 million.

Alpha and CDL will co-finance the portfolio in the ratio of 60:40.

Investors in the PPS transaction will, in addition to a participation in asset divestment, be entitled to a fully secured fixed coupon payout of 5 per cent interest per annum for a period of five years. This is in relation to a component of the PPS transaction involving the subscription of bonds.

CDL executive chairman Mr Kwek Leng Beng said: "Over the past two years, we have been advancing our two-pronged diversification strategy of developing new overseas and investment platforms. By building on the success of our first PPS transaction last year, this new initiative allows us to recycle capital for our growth plans.

"In line with CDL's long-term investment perspective, we are committed to realising the capital appreciation potential of our real estate assets. By partnering our co-investor Alpha in this new PPS platform, we continue to remain a substantial investor in these prime assets."

In December last year, nearly exactly one year ago, CDL also set up a PPS structure to monetise its Quayside Collection assets - comprising hotel, retail and residential assets - in partnership with Blackstone Tactical Opportunities Fund and CIMB.

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