Sunway to buy stake in RM1.6b Singapore redevelopment project

By MARK RAO / Graphic By TMR

Sunway Bhd plans to acquire a stake in the Singapore-based Brookvale Park project in a deal worth a total S$530 million (RM1.59 billion) and redevelop the site into a private residence.

The property, construction, education and healthcare conglomerate said it jointly tabled the bid with Hoi Hup Realty Pte Ltd via its indirect wholly owned unit, Sunway Developments Pte Ltd (SDPL).

Under the agreement, the parties will acquire the 34,654 sq m leasehold land located in Clementi, Singapore, from its majority owners and subsequently redevelop the property into a new private residential project with an allowed plot ratio of 1.6 times.

Brookvale Park is currently on a 999-year leasehold and serving as a 160-unit private residential estate.

As part of the acquisition, Hoi Hup and SDPL, together with SC Wong Pte Ltd, will form a joint-venture (JV) company to participate in the redevelopment with interests allocated at 60%, 30% and 10% respectively.

Hoi Hup and SC Wong are private limited companies incorporated in Singapore with paid-up capitals of S$3 million and S$15 million respectively.

Meanwhile, SDPL’s investment in the JV unit is estimated at S$70 million.

Sunway said the redevelopment project in Singapore is expected to contribute positively to the group’s earnings starting from financial year ending Dec 31, 2019, onwards.

“The proposed project is subjected to normal development and construction risks,” it told Bursa Malaysia last Thursday.

“However, with the past experiences and expertise of Hoi Hup and SDPL in development and construction of similar projects, this risk could be mitigated.”

In a separate filing, Sunway Real Estate Investment Trust (REIT) announced that its substantial unitholder RHB Trustees Bhd subscribed to an RM35 million valued onemonth commercial paper issued by Sunway.

This follows the maturity of an earlier subscription announced on Jan 15 this year and is part of Sunway’s ongoing RM2 billion commercial paper and mediumterm note programme. The subscription is due to mature on March 15, 2018, and is at a 3.9% discount per annum.

Sunway REIT — which operates as part of the Sunway group — said the investment in money market instruments that offer competitive discount rates is in line with its active capital management strategy.