Tall & Urban News

A consortium of investors led by Singapore-listed Perennial Real Estate Holdings announced on May 6 2020 that they are selling a 50 percent stake in AXA Tower for and transferring 50 percent of the outstanding loan to Alibaba Singapore, a subsidiary of the NYSE-listed Chinese e-commerce behemoth, Alibaba Group Holdings. The deal is expected to be completed by end June 2020, and is based on a property purchase price of $1.68 billion (US1.1 billion).

The Perennial-led consortium has in turn, transferred the remaining 50 percent equity stake in AXA Tower and the remaining 50 percent outstanding loan to a new entity, PRE13.

Other investors in the Perennial-led consortium include HPRY, a wholly-owned investment company of Kuok Khoon Hong, group chairman and CEO of Wilmar International, who is one of the largest sponsors of Perennial as well as its chairman. Perennial’s existing stake in AXA Tower is 31.2 percent and HPRY holds a 10.1 percent stake, bringing Kuok’s deemed interest in AXA Tower to 41.3 percent.

Following the divestment, Perennial’s stake will be pared to 20 percent in PRE 13, and a direct stake of 10 percent in AXA Tower. Perennial’s share of the net proceeds will be about $196.4 million, and its share of the divestment gain will be $45 million (US$31 million). After investing $58.8 million (US$41.5 million) into PRE 13, its net proceeds will be $137.6 million (US$97.2 million).

Another investor in the Perennial-led consortium is Singapore Press Holdings, whose wholly-owned subsidiary PE One Pet Ltd had acquired a 5.29 percent stake in AXA Tower for $19.3 million (US$13.6 million) back in 2015. PE One will receive $33.2 million (US$23.4 million) from the sale to Alibaba.

PE One will reinvest $5.9 million (US$4.1 million) of its proceeds for a 2 percent stake in the new entity, which represents a 1 percent effective interest in the redevelopment of AXA Tower.

Upon completion of the deal, PRE 13 will enter into a joint-venture agreement with Alibaba Singapore to redevelop AXA Tower.

A cylindrical building, the 52-story AXA Tower is a landmark in the CBD. When completed in 1986, it was the tallest skyscraper in Singapore. It has an auspicious address of 8 Shenton Way and was originally the Treasury Building. It was then renamed Temasek Tower in 1997 after the Ministry of Finance and Ministry of Trade and Industry relocated to The Treasury on High Street. It was renamed AXA Tower in 2011 when global financial services industry giant AXA became an anchor tenant.

For more on this story, go to Edge Prop.