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Joint venture buys KeyPoint for $360m
The 25-storey, 7,268.9 sq m commercial block has 62 years left on the lease
By: Gan Yu Jia
A JOINT venture by two property developers - Fragrance Group and World Class Land, a subsidiary of Aspial Corporation - has snapped up a downtown commercial building for $360 million.
This sale of KeyPoint, at the junction of Beach Road and Jalan Sultan, was priced at $75 million, or 26.3 per cent, above the last valuation of $285 million as of Sept 30 last year.
Frasers Centrepoint Asset Management, the manager of Frasers Commercial Trust which owned KeyPoint, revealed that this transaction resulted in a gain of $72.8 million for Frasers' unitholders.
A firm called Bayfront Ventures has been set up to acquire the property, with Fragrance Group and World Class Land having an equal share in the special purpose company.
The cost of the acquisition and development will be funded internally by both firms, and through bank borrowings.
The 25-storey, 7,268.9 sq m commercial block has 62 years left on the lease.
Frasers said that KeyPoint was considered suitable for divestment as it was identified as an asset which had reached its optimal economic life cycle.
Upgrading and rejuvenating KeyPoint would hence entail 'significant amount of additional capital expenditure'.
The sale and purchase agreement covers all aspects of the development, including its three-storey podium, 22-storey office tower and four-storey carpark containing 227 parking spaces.
The 34-year-old site is zoned for commercial use and can potentially yield a commercial gross floor area of approximately 426,421 sq ft.
Bayfront Ventures is considering various options to redevelop the site, including a commercial development with retail shops and offices, or an integrated development comprising retail shops, offices and residential units.
Fragrance Group and World Class Land have teamed up before. They developed the 689-unit Parc Rosewood condominium and acquired Tai Keng Court earlier this year, for example.
Mr Koh Wee Seng, director of Bayfront Ventures and World Class Land, said in a statement: 'We have enjoyed a mutually rewarding partnership with the Fragrance Group and intend to further build on the success of our alliance through the KeyPoint project.'