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Alpha's Draycott Eight units may go on the market soon

It is said to have appointed Colliers, JLL to find bulk buyer for the 22 units; it paid S$2,300 psf for units in 2010

By Kalpana Rashiwala

[email protected]

@KalpanaBT

Sep 6, 2016


A STACK of 22 units in one of the three blocks of Draycott Eight is expected to come on the market soon for bulk sale. Market watchers reckon the stack could fetch around S$143 million to S$150 million, which would translate to S$2,180-S$2,300 per square foot (psf) on a total strata area of 65,401 square feet.

The units are held by a fund managed by Alpha Investment Partners, which in 2010 paid a Morgan Stanley-managed fund S$2,300 psf or slightly over S$157 million for a stack of 23 units - comprising 22 four-bedroom apartments and a penthouse - in the block. In late 2012, the Alpha fund sold one of the four-bedders, an eighth-floor unit, for S$7.18 million or S$2,480 psf, leaving it with 21 apartments and a penthouse.

Standing on a site with about 80 years' balance lease, Draycott Eight comprises 136 units in its three blocks of 24 storeys each.

The units that the Alpha-managed fund acquired from the Morgan Stanley fund are in a block that also has another 23 units that were sold last year by another Morgan Stanley-managed fund for S$2,180 psf or S$149.15 million; the buyer in that deal was a vehicle controlled by the Chiu family behind Hong Kong's Far East Consortium International.

Both Morgan Stanley funds acquired their respective stacks of units at the same time in 2007 at an identical price of S$2,600 psf from Forum Capital Partners.

Forum Capital in turn had purchased all 46 units in the block from Draycott Eight developer Wing Tai in 2006 for S$214.92 million or S$1,572 psf on a total strata area of 136,716 square feet.

Alpha is said to have appointed Colliers and JLL to help it find a bulk buyer for the 22 units. An expression of interest (EOI) exercise is likely to be conducted although the timeline has yet to be determined.

Market watchers expect the units to fetch at least S$2,180 psf - the price for the Morgan Stanley-Chiu family deal last year. However, they reckon the Alpha fund would be gunning above its entry price of S$2,300 psf and probably be hoping for around S$2,400-S$2,500 psf.

The 22 units, of which a quarter are vacant, could be transacted potentially through a sale of shares in the special-purpose vehicle that holds the units. Alternatively, an outright asset sale could take place, though this would attract additional buyer's stamp duty of up to 15 per cent.

Separately, word on the street is that Blackstone put its 21 Anderson Royal Oak Residence on the market a few months ago - after receiving an unsolicited offer of S$2,200 psf for the 10-storey freehold asset comprising 34 units.

Blackstone then appointed Savills to conduct an EOI to widen the search for buyers; an indicative price of S$2,400 psf was mentioned. The upside pitched to potential buyers is that they could refurbish the asset, including reconfiguring the penthouses into smaller units; the cost of doing so was estimated at S$200 psf.

No deal has been sealed so far and Savills' appointment has lapsed. Blackstone paid S$164 million or S$1,917 psf on the total strata area of 85,552 square feet in a deal that was sealed in late-2014.