First Sponsor to build mixed-use Sydney skyscraper with Australia's ICD

Singapore

A CONSORTIUM led by mainboard-listed First Sponsor has partnered Australia's ICD Property to redevelop the iconic City Tattersalls Club (CTC) project in Sydney.

The 124-year-old CTC is one of the largest and oldest premier business and sporting clubs in Sydney. The members club owns the property at 192 to 204 Pitt Street in the core central business district of Sydney, with a site area of 2,337 square metres.

The consortium comprises First Sponsor's wholly-owned subsidiary FS Australia Property 5 (FSAP5), Australian firm Applewood Holdings and Hong Kong-incorporated Bull-Oak Investments, First Sponsor said on Monday.

Applewood and Bull-Oak are investment vehicles of high net worth individuals.

The tie-up between the consortium and ICD comes after the City of Sydney granted envelope approval to ICD for the Stage 1 concept development of the site.

The City's approval gives the green light for plans to revamp the entire clubhouse. This includes retail outlets, restaurants, a hotel and club reception on the ground level, an event space, a premium co-working centre, health and well-being facilities, as well as other member facilities.

There are also plans to build a skyscraper, estimated to be 49 storeys, in the airspace above the historic site. This tower is expected to have 246 apartments and a 100-room hotel, although its make-up is still fluid, subject to approval from the authorities and the outcome of a competition for architects to vie for the site's design.

The estimated total development cost will be more than A$400 million (S$371 million), a First Sponsor spokesman told The Business Times. This amount may change as the development progresses.

FSAP5, Applewood and Bull-Oak will acquire 39.9 per cent, 30.1 per cent and 10 per cent stakes, respectively, in both ICD SB Pitt Street Trust (ISPS Trust) and its trustee, by subscribing to new units in the trust and new shares in the trustee. This means the consortium will hold 80 per cent in total of the trust and trustee.

ICD Land, a member of the ICD Property group, owns all issued units and shares in the trust and trustee as at Monday.

First Sponsor will also be the sole construction financier for the project's entire delivery.

By way of subscription of loan notes, the group will provide up to A$370 million in funding. The secured construction facility will be drawn down in tranches starting from 2022.

ICD deputy managing director Sal Quah said on Monday that receiving construction funding from First Sponsor will allow for a "more efficient and streamlined process", with works to start after Stage 2 approval.

After receiving the Stage 2 development approval from the City, the trustee will enter into sale contracts with buyers of the new apartments, on behalf of the club.

Under a 2015 agreement with CTC, the trustee will be paid a development fee equal to gross proceeds from the residential sale contracts, interest earned on deposits, and any other income or gain from the residential component, including rent arising from any lease of the apartments.

The collaboration between the consortium and ICD is subject to regulatory approvals and conditions, expected to be achieved in Q1 2020.

First Sponsor holds investments primarily in China, the Netherlands and Germany. The CTC site will be its first project in Australia.

First Sponsor shares rose S$0.01 or 0.8 per cent to close at S$1.30 on Monday, after the announcement was made.