Singapore Companies
Published November 10, 2006

Keppel Land sells Hotel InterContinental stake
The firm will make a profit of $56.9m from the sale


KEPPEL Land yesterday said that it has agreed to sell its 37.6 per cent stake in Hotel InterContinental for $73.8 million - walking away with a profit of $56.9 million in the process.

The property developer, Singapore's third-largest by assets, said that its associated company Bugis City Holdings (BCH) - which owns 90 per cent of Hotel InterContinental - yesterday entered into a sale and purchase agreement with property firm Pacific Coast Assets Inc for the sale of BCH's entire shareholding for $176.7 million. Keppel Land owns 41.8 per cent of BCH, giving it an effective stake of 37.6 per cent in the hotel.

CapitaLand, which owns another 49.5 per cent of BCH (and therefore a 44.6 per cent stake in Hotel InterContinental), said in August that it will similarly sell its stake in the company to Pacific Coast. Yesterday, CapitaLand said it will see a net gain of $44.1 million from the sale.

Both deals value the underlying property at $250 million. The price was arrived at on a willing-buyer and willing-seller basis, said both Singaporean developers. The ultimate owner of Pacific Coast is Thai Beverage tycoon Charoen Sirivadhanabhakdi, one of Thailand's wealthiest businessmen.

He now owns 100 per cent of Hotel InterContinental, after Inter-Continental Hotel Investment - which owns the other 10 per cent of the hotel - also agreed to sell its stake to Pacific Coast.

Once the sale is complete, both CapitaLand and Keppel Land will complete their respective exit plans for the entire Bugis Junction development.

The retail portion was sold to CapitaLand's real estate investment trust (Reit) CapitaMall Trust last year while the office component was sold to Keppel Land, which then injected the stake into its office Reit K-Reit Asia earlier this year.

'The sale of Keppel Land's interest in the hotel is part of its strategy to unlock value from its investment properties, and to focus on property development and fund management,' said Keppel Land in a statement to the Singapore Exchange.

Keppel Land added that the sale will increase the net tangible asset per share of the company to $2.20, from $2.12 as at Sept 30. Shares of Keppel Land climbed 15 cents to close at $5.80 yesterday, while CapitaLand's stock rose 10 cents to $5.75.