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Property developer Oxley Holdings is divesting the Novotel and Mercure hotels in Stevens Road for a total of $950 million, revealed an SGX filing on Thursday (10 Jan).
The Business Times believes the buyer is Ang Tjoen Ming, an Indonesian billionaire commonly called Tahir who has accumulated his wealth through banking and property development. The deal is understood to have been brokered by Michelle Lek, director of investments at Quillion Global.
According to the stock exchange filing, Oxley accepted a letter of intent (LOI) for the purchase of the properties at 28 and 30 Stevens Road. Except for certain paragraphs, the document is intended to be non-binding and is subject to, among others, both parties signing a definitive sale and purchase agreement (SPA).
“Under the terms, upon receipt of the sum of $9.5 million (1.0 percent of the Consideration) by Oxley Gem, the purchaser shall be entitled to carry out due diligence in respect of the properties during the period up to 15 April 2019.
“The purchaser shall pay a sum of S$38.0 million (4.0 percent of the consideration) on 28 February 2019, and a further sum of S$47.5 million (5.0 percent of the consideration) on the signing date of the SPA or 15 April 2019, whichever is earlier. The aforesaid deposits shall be non-refundable save upon the occurrence of certain events as set out in the LOI.”
Oxley had previously acquired the site now occupied by the hotels in 2013 from car tycoon Peter Kwee’s Exklusiv Resorts for $318 million. The leasehold land has a tenure of 103 years commencing from July 2013.
The 254-room Novotel and 518-room Mercure opened in late-2017. Based on Oxley’s latest corporate slides in November 2018, both properties generate a combined recurring income of $53 million per annum at an occupancy rate of 83 percent.
Although these are Oxley’s only hotel properties, the developer is believed to be selling them after its leverage ratio reached 244.9 percent as of end-September 2018. This is almost four times the 65.5 percent average leverage ratio of Singapore developers during the said period.
The high debt load is the result of Oxley’s acquisition spree during the en bloc fever in 2017 and the first half of 2018, when it acquired Mayfair Gardens, Serangoon Ville and Rio Casa, in addition to Chevron House at Raffles Place.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg
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