Hiap Hoe Holdings throws in the towel, buys all unsold units at Treasure on Balmoral

[lifeline]

http://sbr.com.sg/residential-property/news/hiap-hoe-holdings-throws-in-towel-buys-all-unsold-units-treasure-balmoral





Hiap Hoe Holdings throws in the towel, buys all unsold units at Treasure on Balmoral

In order to dodge hefty fines.

Upscale condominium development Treasure on Balmoral stands empty at Balmoral Road. After several attempts to sell the property, its mainboard-listed developer Hiap Hoe, along with its JV partner SuperBowl Holdings, has finally given up.

In a release to the SGX, the company revealed that its controlling shareholder, Hiap Hoe Holdings, is buying all 48 units in Treasure on Balmoral, after the company failed to sell any of the units in the project.

The property was initially launched for sale in September 2012 at an initial launch price of between $2,044 to $2,375 per square foot. In October 2013, Hiap Hoe appointed Savills Singapore as its exclusive marketing agent for the divestment of the property via a private treaty, with the sale price pegged at a much lower $2,100 psf.

Hiap Hoe was still unable to find a buyer at this price. The company then launched an Expressions of Interest exercise for the property’s bulk sale in July this year with a guide price of $1,850 psf.

“Following the close of the EOI exercise in August 2014, the Group had not received any satisfactory offers and the offers received contained terms and conditions which were not favourable to Hiap Hoe SuperBowl. The highest offer received by the Group for all the Properties was S$1,750 psf or an aggregate price of approximately $181 million for all the Properties, which represents a price that was 5.4% to 19.8% less than the EOI guide price,” Hiap Hoe stated.

Hiap Hoe Holdings is buying all the units in Balmoral to avoid paying hefty extension fees under the qualifying certificate rules. The total purchase consideration for the deal is $72,833,151, which will be paid in cash.

The purchase consideration represents approximately 19.45% of the latest audited consolidated net tangible assets of the Group of $374,536,721 as at 31 December 2013.

[reporter2]

http://www.straitstimes.com/archive/tuesday/premium/money/story/hiap-hoe-sells-entire-condo-parent-firm-20141209

Hiap Hoe sells entire condo to parent firm

Treasure on Balmoral sales deadline, property slide lead to unusual move

Published on Dec 9, 2014 1:41 AM

By Mok Fei Fei


THE faltering property market has led to a developer selling all the units in a posh new condominium to its parent company at a discount after other buyers turned their noses up at the asking price for the apartments.

Mainboard-listed Hiap Hoe was forced into the unusual move after being caught out in the real estate downturn while also having to meet the deadline for selling units in a completed project.

It has been trying to offload units in the luxury Treasure on Balmoral near Orchard Road since it launched the high-end project in September 2012 at an initial price of between $2,044 per square foot (psf) and $2,375 psf.

But it failed to sell a single apartment.

In October last year, it appointed marketing agent Savills to sell the entire development consisting of 103,439 sq ft of total strata area with a guide price of $2,100 psf.

Hiap Hoe received a number of enquiries but no formal offer.

So it tried a new gambit in July by lowering its asking price to around $191.4 million or $1,850 psf.

Again there were no acceptable offers; the best came in at $181 million.

That left it in a tricky position. Qualifying Certificate (QC) rules give developers up to five years to finish building a project and two more years to sell all the units. Unsold units cannot be rented out.

Treasure on Balmoral received its Temporary Occupation Permit on Nov 1, 2012 so its apartments would have had to be sold by Nov 1 this year.

Its parent company, Hiap Hoe Holdings, which owns 69.85 per cent of Hiap Hoe, has stepped in.

It is buying all 48 units for $185 million or $1,789 psf - 3.3 per cent below the July price and about 12.5 per cent to 24.7 per cent below the launch price.

A back-of-envelope calculation shows that the $1,789 psf price tag works out to a discount of about 15 per cent to the October guide price of $2,100 psf.

Seen this way, it could be considered that the developer is absorbing the additional buyers' stamp duty on behalf of the buyer, based on the October asking price.

The deal, which is conducted via a share sale of the entity that owns Treasure on Balmoral, is known as an interested party transaction as Hiap Hoe Holdings is an investment holding company controlled by Hiap Hoe's executive chairman, Mr Teo Ho Beng, and its managing director, Mr Roland Teo Ho Kang.

Hiap Hoe did a similar kind of deal about two months ago when it offloaded some units at its Skyline 360 and Signature at Lewis projects to a subsidiary when QC rules started to bite.

"The group's attempts to sell the properties have been made even more challenging by the several rounds of cooling measures introduced by the Singapore Government which have dampened the local property market," the company said in a statement.

The company added that foreign buyers, who traditionally make up a majority of the purchasers of high-end residential developments in prime districts in Singapore, have likely been deterred by the cooling measures and may have turned to markets outside Singapore.

It noted that since it attempted a bulk sale in July, it attracted 45 enquiries and 19 inspections of the properties by developers, funds and other investors.

Market watchers noted that the deal was not unexpected, given that there are many high-end properties that are due to be completed or have been completed.

"The price is fair, it does reflect the current market situation for a bulk deal of this scale," said JLL Singapore international director Karamjit Singh.

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[reporter2]

http://www.businesstimes.com.sg/companies-markets/hiap-hoe-hldgs-buys-all-units-at-treasure-on-balmoral

Hiap Hoe Hldgs buys all units at Treasure on Balmoral

9 Dec


HIAP Hoe Group is selling all 48 units in its District 10 project, Treasure on Balmoral, to avoid paying further extension fees under the qualifying certificate (QC) rules.

It disclosed on Monday that its controlling shareholder, Hiap Hoe Holdings (the investment firm of the founding Teo family), has entered into an agreement to acquire all the shares in Hiap Hoe SuperBowl JV Pte Ltd, which owns the properties, for S$72.83 million after accounting for shareholder loans and other liabilities. This is based on a market value of S$185 million or S$1,789 per square foot (psf) for the 103,439 sq ft project. Hiap Hoe SuperBowl JV is owned by Hiap Hoe Group and its subsidiary SuperBowl Holdings.

The last expression of interest (EOI) launched in July for the project did not draw satisfactory offers, with the highest offer at S$1,750 psf, below the guided price of S$1,850 psf.

The project was first launch in September 2012 at an initial launch price of S$2,044-S$2,375 psf, and received temporary occupation permit (TOP) in November 2012, so the developer has to pay extension fees for unsold units from this November. Some S$5.52 million of fees were paid for a further six months from Nov 2.

In September, Hiap Hoe Group's unit HH Residences mopped up the unsold units on the top floors of two of the group's projects - Skyline 360° at St Thomas Walk, and Signature at Lewis - also to satisfy QC conditions.