Saudi group tipped as buyer of ex-Chevron House retail, banking units

Singapore

AN ENTITY linked to Saudi Arabia-based Olayan Group is understood to be the party that entered into an expression of interest (EOI) last month to buy the retail podium and the three lowest office floors at 30 Raffles Place, formerly known as Chevron House, for S$315 million.

Olayan Group is a private multinational enterprise set up in 1947 by Suliman Saleh Olayan. It is involved in a gamut of sectors including automotive, industrial equipment and services, construction-related businesses, fast-moving consumer goods, food franchising and investment and real estate, according to information on its website.

Its international property portfolio includes 550 Madison Avenue (formerly known as the Sony Building) in New York and the Knightsbridge Estate in London.

The group has a presence in Singapore, setting up a few companies here in first-half 2019, including Olayan Capital, whose primary business activity is that of a family office.

Olayan Capital's head of real estate for Asia is Jeffrey Ong, who used to be the Singapore country manager at US-based property fund manager AEW.

He is understood to have negotiated AEW's entry into a sale and purchase agreement to buy Chevron House last year for a total of up to S$1.025 billion. Final completion of that transaction is subject to a few conditions, including seller Oxley Holdings completing a major refurbishment of the asset; the revamp, costing about S$100 million, has been completed.

Another condition is that Oxley has to find a buyer or buyers for the office podium (on levels three to five and which is designated for a banking hall) and the retail podium (on levels 1, 2, basement 1 and part of basement 2) of the 32-storey property, leaving AEW with just the 27 office floors above.

To find takers for the retail podium and the three office floors, Oxley last year appointed Cushman & Wakefield and JLL to conduct an expression of interest exercise, which closed in October.

But no deal materialised from that exercise as offers from potential buyers were not high enough. The guide price range at the time worked out to a total sum of between S$431.7 million and S$474.9 million.

With the worsening business sentiment amid the Covid-19 outbreak this year and the clock ticking ahead of the June 30, 2020, extended final completion deadline of AEW's transaction with Oxley, Olayan's entry into the picture last month is timely, saymarket watchers.

"Very few parties can enter into an EOI on May 19 and complete the purchase by June 30. Given Mr Ong's familiarity with the asset, it is possible for Olayan to do so," said a market watcher.

Oxley, in its regulatory filing with the Singapore Exchange on May 19, 2020, did not name the buyer that has entered into the EOI to buy the retail podium and the three office floors. Oxley stated that a refundable deposit of S$3.15 million has been received from the buyer, which may elect to enter into a binding sale and purchase agreement by June 15, and that the asset divestment is expected to be completed by June 30.

Located next to Raffles Place MRT Station, 30 Raffles Place is on a site with 99-year leasehold tenure starting December 1989. This leaves a balance term of about 68.5 years.