S$678 million High Street Centre sale falls through

THE collective sale of High Street Centre has fallen through, after the buyer failed to fork out the initial deposit of S$6.78 million (1 per cent of the S$678 million deal) as its funds were still in remittance.

Marketing agent Cushman & Wakefield said that while the buyer had made “every effort to expedite their movement of funds to Singapore”, the collective sale exercise had a hard-stop deadline to meet on Oct 2.

The buyer was a private equity fund comprising a group of high-net-worth investors from the US, Europe and India, making its first acquisition in Singapore. The group had made the purchase under an exempt private company, Transformation Development (TD), an infrastructure engineering design and consultancy firm.

Since the group did not have the funds to pay for the stamp duty of around S$33.9 million by Oct 2, nor the remaining deposit of S$5.58 million, the collective sale committee of High Street Centre could not file its application to the Strata Titles Board in time to meet the deadline. 

“(This was) despite the fact that our solicitors had ensured that we were able and ready to do the transaction had the funds arrived even at the 11th hour,” said Christina Sim, Cushman & Wakefield’s senior director of capital markets. 

She added that the funds were expected to land anytime between now and Oct 9. The delay was previously reported to have been due to regulatory checks. “Once the purchasers’ bankers manage to satisfy regulatory measures, the monies will be remitted, and all requisite payments will be up to date,” the consultancy had earlier said.

TD is understood to have forfeited around S$1.2 million of its deposit for the en bloc purchase. 

Its offer for the collective sale was the only one received by owners of the 99-year leasehold development.

The 1 per cent deposit was previously due on Jul 31, but was delayed as the buyer was subjected to “heightened regulatory vigilance on fund movements”, said Cushman & Wakefield in an earlier letter dated Aug 7.

The buyer was still “committed to completing this deal”, although it may take longer than expected, the consultancy emphasised then. A deposit of S$200,000 was initially made as a “gesture of sincerity”.

Still, Sim told The Business Times that this is not the end for the High Street Centre collective sale. While the team may “need a breather” from this job, they have also learnt their lesson in accounting for more time when fund remittance is involved.

Private bankers had said the fund remittance process can sometimes take three to six months. 

The High Street Centre collective sale attempt came after several previous tries closed without any bids.

The commercial development was first put up for sale in June 2020 at a reserve price of S$800 million. The tender was relaunched in October 2023 at S$748 million, 6.5 per cent lower than the previous attempt, but there were no bids that met the reserve price. 

In the latest attempt, the reserve price remained at S$748 million, but Cushman & Wakefield said plans were underway to lower the price to below S$700 million. This was eventually done in early August, with the price cut to S$678 million, after the tender closed and the requisite 80 per cent mandate was met. 

As at Aug 23, the move had won the support of over 85 per cent of unit owners.

Located at One North Bridge Road, High Street Centre sits on a site spanning 60,298 square feet (sq ft) with an allowable gross plot ratio of 7.72. The 30-storey mixed-use development houses about 430 strata-titled units, including offices, retail units and residential apartments.

In an earlier press statement, Sim said High Street Centre is the only commercial opportunity with the flexibility of incorporating a hotel or serviced apartment component within the development. 

The firm also noted that the Urban Redevelopment Authority will support the development of at least 60 per cent of the site’s 466,085 sq ft of gross floor area for commercial use. This may comprise a mix of office and retail, including food and beverage.

Some 40 per cent may be allocated for the redevelopment of a hotel that has no more than 450 keys, or for residential or serviced apartment use.

The lower price tag of S$678 million would work out to around S$1,960 per square foot per plot ratio (psf ppr), should the buyer use the 40 per cent quantum for residential use, or about S$2,080 psf ppr should it be used for hotel purposes. The land rate includes the payment of a land betterment charge, as well as a premium to top up the lease to a fresh 99 years.