{"id":43910,"date":"2020-05-06T23:44:54","date_gmt":"2020-05-06T15:44:54","guid":{"rendered":"http:\/\/www.mingtiandi.com\/?p=43910"},"modified":"2021-08-07T15:44:38","modified_gmt":"2021-08-07T07:44:38","slug":"alibaba-buys-50-of-s1-7b-sgs-axa-tower-from-perennial","status":"publish","type":"post","link":"https:\/\/www.mingtiandi.com\/real-estate\/finance\/alibaba-buys-50-of-s1-7b-sgs-axa-tower-from-perennial\/","title":{"rendered":"Alibaba Buys 50% of SG\u2019s S$1.7B AXA Tower From Perennial Consortium"},"content":{"rendered":"
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Alibaba is acquiring a half stake in Singapore’s AXA Tower<\/p><\/div>\n

Alibaba has agreed to acquire a 50 percent stake in Singapore\u2019s AXA Tower in a deal that values the landmark office property at S$1.68 billion ($1.2 billion) in one of the few major transactions the city has seen this year.<\/p>\n

The e-commerce giant, which is already an anchor tenant in the building, is buying the half stake from an investment consortium led by Singapore\u2019s Perennial Real Estate Holdings, according to a statement by the SGX-listed developer. JLL\u00a0acted as exclusive capital markets advisor to Alibaba Singapore on the acquisition.<\/p>\n

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Following completion of the transaction, which is expected to take place in June, Alibaba and the Perennial-led consortium will redevelop the 50-storey grade A office property in the heart of the city\u2019s central business district into a new integrated complex with commercial, hotel and residential components.<\/p>\n

The acquisition comes as a welcome shot in the arm for the city\u2019s commercial property market, which has stalled as a result of COVID-19 with office investment transactions plunging 87 percent to $136 million in the first quarter of the year compared with the previous three months, according to CBRE.<\/p>\n

Giving Singapore a Vote of Confidence<\/h3>\n

\u201cThis transaction will provide a confidence boost to the Singapore market and reaffirm investor appetite for CBD assets,\u201d said Ting Lim, JLL\u2019s head of capital markets in Singapore.<\/p>\n

\"jack

Jack Ma may have left Allibaba, but the company retains his taste for real estate<\/p><\/div>\n

Located at 8 Shenton Way, the 1.05 million square foot (97,548 square metre) property has been approved for redevelopment into as much as 1.55 million square feet of gross floor area under the CBD Incentive Scheme which Singapore began implementing last year.<\/p>\n

The current structure, which was built in 1986, will be completely demolished and a new complex will be built in its place with around 60 percent devoted to office and retail space, and the remainder taken up by a hotel and luxury residences, according to JLL.<\/p>\n

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Regina Lim, JLL\u2019s head of Asia Pacific capital markets research, said that the investment by the tech giant represents a vote of confidence for Singapore and demonstrates the city\u2019s attractiveness to technology and e-commerce companies.<\/p>\n

\u201cAs a result of increased demand for their services and strong capital positions, they have remained active in their expansion and investment plans, with global gateway cities like Singapore proving an attractive destination for deployment,\u201d said Lim.<\/p>\n

Joining Forces with a Tech Giant<\/h3>\n

Under the terms of the agreement, Alibaba will acquire a 50 percent stake in special purpose vehicle Perennial Shenton Holding Pte Ltd and will take on 50 percent of the consortium\u2019s outstanding shareholders\u2019 loan.<\/p>\n

\"Ting

JLL’s Ting Lim sees the investment boosting confidence in the Singapore market<\/p><\/div>\n

The consortium \u2013 which includes Singapore Press Holdings and Perennial chairman Kuok Khoon Hong \u2013 is selling the stake in AXA Tower five years after acquiring the asset from BlackRock for S$1.2 billion.<\/p>\n

Alibaba, which has a controlling stake in Southeast Asia\u2019s largest e-commerce platform, Lazada, is boosting its presence in Singapore after its HK$13 billion listing on the Hong Kong stock exchange last November \u2013 the largest equity offering of the year globally.<\/p>\n

As China\u2019s largest e-commerce player, Alibaba recorded revenues of over $56.15 billion in 2019 and has a history of investing in corporate real estate to accommodate its operations. In its hometown of Hangzhou in China\u2019s Zhejiang province, the online firm founded by Jack Ma built a corporate campus where 20,000 of its more than 100,000 global team members are employed.<\/p>\n

Slimming Down Ownership Interest<\/h3>\n

The sale of the interest in AXA Tower will provide Perennial with S$137.6 million in cash as the company looks to pay off S$1.3 billion in debt maturing this year.<\/p>\n

Just three weeks ago, the company sold its remaining 30 percent stake in 111 Somerset to a unit of casino magnate Stanley Ho\u2019s Shun Tak Holdings for S$155.1 million.<\/p>\n

Following the sale of AXA Tower, the firm\u2019s 32 percent stake in the building will be reduced to 10 percent, according to the company\u2019s stock exchange filing.<\/p>\n

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\u201cThe divestment of AXA Tower aligns with our capital recycling strategy to deliver a divestment gain, while retaining our involvement to create value via the redevelopment of the prime property which is strategically sited within the Greater Southern Waterfront with breathtaking sea views,\u201c said Perennial\u2019s CEO Pua Seck Guan.<\/p>\n

In a separate filing, Singapore Press Holdings said that the transaction, which will see its 5.29 percent stake in AXA Tower slimmed down to one percent, represents a divestment of a non-core investment.<\/p>\n

\u201cThe sale is in line with our prudent capital management and capital recycling strategy which allows us to redeploy the proceeds into our core businesses to create shareholder value,\u201d said the company\u2019s CEO Ng Yat Chung.<\/p>\n

Even before the COVID-19 crisis fully gripped its home city, SPH last month announced that its net profit for the half year ending 29 February had fallen by 9.3 percent. Also during April, Chung and other board members said they were taking a voluntary 10 percent cut to their directors fees with the CEO also cutting his pay by the same amount.<\/p>\n","protected":false},"excerpt":{"rendered":"

Alibaba has agreed to acquire a 50 percent stake in Singapore\u2019s AXA Tower in a deal that values the landmark office property at S$1.68 billion ($1.2 billion) in one of the few major transactions the city has seen this year.<\/p>\n

… Read More>><\/a><\/p>\n","protected":false},"author":556,"featured_media":43915,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"categories":[3391],"tags":[715,8318,5382,5359,3013,1671,5574,282,7254,7886],"ppma_author":[9237],"authors":[{"term_id":9237,"user_id":556,"is_guest":0,"slug":"james-hatton","display_name":"James Hatton","avatar_url":"https:\/\/secure.gravatar.com\/avatar\/2ab46ebcd027a433dd520eb2935b71cf?s=96&d=mm&r=g","user_url":"","last_name":"Hatton","first_name":"James","description":""}],"_links":{"self":[{"href":"https:\/\/www.mingtiandi.com\/wp-json\/wp\/v2\/posts\/43910"}],"collection":[{"href":"https:\/\/www.mingtiandi.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.mingtiandi.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.mingtiandi.com\/wp-json\/wp\/v2\/users\/556"}],"replies":[{"embeddable":true,"href":"https:\/\/www.mingtiandi.com\/wp-json\/wp\/v2\/comments?post=43910"}],"version-history":[{"count":0,"href":"https:\/\/www.mingtiandi.com\/wp-json\/wp\/v2\/posts\/43910\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.mingtiandi.com\/wp-json\/wp\/v2\/media\/43915"}],"wp:attachment":[{"href":"https:\/\/www.mingtiandi.com\/wp-json\/wp\/v2\/media?parent=43910"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.mingtiandi.com\/wp-json\/wp\/v2\/categories?post=43910"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.mingtiandi.com\/wp-json\/wp\/v2\/tags?post=43910"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/www.mingtiandi.com\/wp-json\/wp\/v2\/ppma_author?post=43910"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}