KOP Ltd to focus on mixed-use devts in key China cities

Singapore

SCORPIO East Holdings, now known as KOP Limited, following a $150 million reverse takeover, will focus on large entertainment-driven, mixed-use developments in key Chinese cities.

First off is Winterland Shanghai, a $2.8 billion project on 18 hectares of land. Construction is expected to begin around the first quarter of next year and the development is expected to be completed by end-2018. KOP will hold a controlling stake in the development, which will include retail, office, residential and hotel components, complementing strong entertainment content that will include a theme park, hiking trail and beach club.

The cost will be funded by seeking partners, financing instruments and presales in the project.

Besides Shanghai, KOP is looking for such opportunities in other key Chinese cities, such as Beijing, Guangzhou and Shenzhen, KOP's group CEO, Ong Chih Ching, said yesterday.

The counter will resume trading on the Catalist board of Singapore Exchange on Wednesday following a recent placement exercise for 80 million shares at 28 cents per share that has put at least 15 per cent of the company's stock in public hands.

KOP Limited is 48.35 per cent owned by KOP Group Pte Ltd, whose major shareholders are Ms Ong, executive director Leny Suparman, Geraldine Ong Siew Ting and Jin Lu. Other shareholders of the listed entity include Wang Xuan (8.19 per cent) and ex-UOB Kay Hian star stockbroker Han Seng Juan (2.115 per cent).

Among the assets that KOP Limited owns are Montigo Resorts, Nongsa in Batam; the 39-room Cranley Hotel in South Kensington, London; and a 39.9 per cent stake in The Ritz-Carlton Residences along Cairnhill Road, where 32 units are still available for sale. The group also holds a 20 per cent stake in a company that will open the Singapore Pinacotheque de Paris museum at Fort Canning Centre in 2015.

Ms Suparman said KOP will tap synergies between real estate and entertainment to create the next generation of creative developments. Noting that mixed-use projects traditionally need strong anchor tenants, she said: "In our case, in addition to that, we'll have a very rich entertainment content. That will set us apart from the other mixed-use retail centres. Especially with the technology, digital, online buying, we feel that the retail scene will go through a very drastic change within the next five years . . . We feel we have to be slightly ahead of the trend to make sure we are relevant by the time that these huge projects are completed in four, five years' time."

Collaborations will be key to executing KOP's ambitious plans.

"We don't know how to do a lot of things but we know how to get partners to help us execute those and get it done," said Ms Ong.

Even as the group focuses increasingly on harnessing synergies between the entertainment and real-estate divisions of the listed entity, it will help steer the former Scorpio East entertainment business towards more edutainment activity such as exhibitions that drum up not only ticket and souvenir sales but also generate F&B business, making them a more stable business. Moreover, schools receive subsidies for excursions to such exhibitions, noted KOP officials.

On the property front, the company will continue developing residential, commercial and hospitality projects.

KOP will build more Montigo Resorts, with their niche of pampering families. It is also looking at recurring income. KOP is tipped to hold a stake in a consortium that is widely expected to ink a deal soon for the acquisition of Keppel Reit's majority stake in Prudential Tower. The Business Times earlier reported the pricing as being close to $520 million for the 221,241 sq ft of net lettable area, or 92.8 per cent share of the building that the Reit owns. The top floor of the 30-storey office tower is owned by Prudential and half of the 16th floor is held by a private investor. The building is on a site with a balance lease term of about 81 years. Major tenants in the building include Prudential Assurance Singapore, UniCredit Bank and Compass Office.

Market watchers say a key draw of the property is the prospect of doing strata sales in the building, which will be facilitated by the fact that Prudential Tower is already a strata-titled property. There are two strata units per floor on the lower levels and one strata title per floor on upper levels. "They may do strata sales for part of the space while holding the rest for recurring rental income," said an industry observer.