Khazanah-Temasek JV sells unit for RM1.4b

The sale represents the 3rd-highest price achieved this year in Asia, and is subject to customary closing conditions


KHAZANAH Nasional Bhd’s jointventure (JV) company with Singapore state investor Temasek Holdings Pte Ltd, M+S Pte Ltd, has agreed to sell its wholly owned subsidiary, OphirRochor Hotel Pte Ltd (ORH) to Hoi Hup Realty Pte Ltd, for S$475 million (RM1.44 billion) or US$1.39 million per key.

M+S, which is 60% owned by Khazanah, was set up in June 2011 to develop the Marina One in Marina Bay and Duo in Bugis; two integrated developments in central Singapore.

M+S, in a statement yesterday, noted that the proposed transaction of S$475 million marks the highest price ever achieved for a stand-alone hotel transaction in Singapore.

The sale represents the third-highest price achieved this year in Asia, and is subject to customary closing conditions.

ORH is the developer and owner of Andaz Singapore, a five-star luxury lifestyle hotel by Hyatt Hotels Corp which opened its doors in 2017 and is the first Andaz hotel in South-East Asia.

The 342-room hotel occupies the top 15 floors of Duo Tower and features a wide variety of dining options, a rooftop venue and observation deck, and premium meeting facilities.

It is part of the mixed-use development Duo and is situated in the Ophir-Rochor corridor in Singapore, next to the cultural neighbourhood of Kampong Glam and has direct connectivity to Bugis MRT (Mass Rapid Transit) Station.

M+S CEO Kemmy Tan (picture) said Andaz is an integral part of Duo’s success in just two years of operations.

“Having assessed such a strong offer, we have determined that the proposed transaction will allow us to maximise returns to our shareholders, while handing over the reins to a very established and exciting developer in Hoi Hup to take the asset forward. M+S will continue to own and manage our assets at Marina One to the optimal level for our shareholders,” she said.

Hoi Hup Realty chairman Wong Swee Chun said the company was attracted to the rarity of this highquality luxury hotel’s offerings and its historic significance, being one of the landmark projects by M+S.

“We are especially excited by the strategic location of the hotel, with Andaz occupying a key node in the transformative Beach Road and Ophir-Rochor corridor.

“We are extremely confident that Andaz will fulfil its potential to become one of the leading luxury hotels in Singapore,” he said.

In July, M+S sold the office and retail portion of the Duo property development in Singapore for RM4.7 billion.

The sale was among the major divestments undertaken by Khazanah, following the sale of its stake in healthcare service provider IHH Healthcare Bhd to Mitsui & Co Ltd for RM8.42 billion at the end of March and the sale of its entire interest in Desaru Investments (Cayman Islands) Ltd to local power producer Malakoff Corp Bhd for RM288 million in early July.

The M+S asset sale came after Khazanah was reported to have hired Morgan Stanley to advice on strategic options for Malaysia Airlines Bhd.

The island republic deal sees M+S divesting its wholly owned subsidiary Ophir-Rochor Commercial Pte Ltd to Allianz Real Estate GmbH and private equity firm Gaw Capital Partners, for S$1.575 billion or S$2,570 per sq ft of net lettable area.

The sale includes Duo Tower, an office block with 20 floors worth of prime Grade-A office space, and Duo Galleria, which has 56,000 sq ft of retail space located right outside the city state’s financial district.

The sale confirms a report by The Malaysian Reserve last year on Prime Minister Tun Dr Mahathir Mohamad’s desire to dispose of some of Khazanah’s properties in Singapore to raise cash to plug the financial hole left by the previous administration.

M+S has delivered two joint development projects in Singapore — Marina One and Duo — which have a total of S$11 billion in gross development value.

The Khazanah-Temasek JV moved to develop the Marina One and Duo developments after Kuala Lumpur and Singapore agreed to a land swap deal in 2010.

Under the deal, Malaysia exchanged three plots of land formerly owned by the Keretapi Tanah Melayu Bhd and three additional plots of land in Bukit Timah for four parcels of land in Marina South and two parcels in Ophir-Rochor.

Khazanah and Temasek are also undertaking joint developments in Iskandar Malaysia through Pulau Indah Ventures Sdn Bhd, a 50:50 JV between the two investment entities.

The company is involved in the development of Afiniti Medini and Avira Medini integrated wellness projects.