Deals fall through for 22 units at Draycott Eight, Parkview Square in Bugis

A sale has failed to materialise for Parkview Square, a 24-storey art deco style office tower in the Bugis area for which Baring Private Equity Asia (BPEA) had been doing exclusive due diligence for a potential purchase at around S$900 million.

Also not happening is the sale of a stack of 22 units at the Draycott Eight condo, in one of Singapore’s most posh residential districts. The Business Times reported in June that an Indonesian family was in exclusive due diligence with a view to buying the units for a total of nearly S$168 million from US-based privately-held alternative investment firm Angelo Gordon.

For Parkview Square - dubbed the “Batman Building” for its design reminiscent of skyscrapers in the fictional Gotham City, home of DC Comics superhero Batman - a price of S$900 million would reflect nearly S$2,700 per square foot (psf) based on the net lettable area (NLA) of 336,000 square feet (sq ft). The property is on a site with about 74 years’ balance lease and its development potential has been maximised.

Word on the street is that BPEA had done due diligence for about 2-3 months. Some technical issues are said to have surfaced that may have resulted in a price gap, leading to a deadlock in negotiations between BPEA and Parkview Square’s owner, Chyau Fwu Development.

Located near Bugis MRT station, the project was developed on a site bought at a state tender in 1997 by the late Hwang Chou-Shiuan or CS Hwang, who built up a business empire in Taiwan under the Chyau Fwu name before moving to Hong Kong in the late 1970s and setting up the Parkview Group.

Over in District 10, the nearly S$168 million expected pricing for Angelo Gordon’s 22 units at Draycott Eight works out to slightly below S$2,570 psf on the strata area of 65,401 sq ft.

The units comprise 21 four-bedroom apartments (most of which are around 2,900 sq ft each) and a duplex penthouse of 4,069 sq ft. Draycott Eight is a 136-unit condo on a site with a balance leasehold tenure of about 74 years. It received a Temporary Occupation Permit in 2005.

Sources say the potential sale of Angelo Gordon’s units to the Indonesian family not materialising is unlikely to have been caused by pricing or due-diligence issues. Nor was the deal breaker a question of whether the transaction could potentially incur additional conveyance duty (ACD) akin to the additional buyer’s stamp duty.

Angelo Gordon - which is registered with the US Securities and Exchange Commission - is believed to have paid under S$2,000 psf for its Draycott Eight units in 2017; it bought them from a fund managed by Alpha Investment Partners.

Draycott Eight, developed by Wing Tai, has 3 residential blocks of 24 storeys each and a distinctive clubhouse in a large black-and-white conservation bungalow.

Market watchers say that while geopolitical and macroeconomic uncertainties, along with rising interest rates, have made big-ticket property investors more selective, the key reasons these 2 deals have not materialised may be quite specific to the respective transactions.