PUBLISHED JUL 6, 2016, 5:00 AM | The Straits Times
Property firm Wing Tai Holdings has thrown in the towel on its Anderson Road joint venture with City Developments (CDL).
Wing Tai yesterday said it has sold its half share in its joint venture company Summervale Properties to CDL for $410.96 million in cash.
Summervale is the developer of Nouvel 18, a 156-unit freehold residential development in Anderson Road that has yet to be launched.
The high-end condo was completed in November 2014, which means Summervale Properties will start incurring qualifying certificate (QC) extension charges on unsold units in the fourth quarter of this year. If all units remain unsold by then, it will have to cough up about $38.2 million in fees.
In March 2007, Wing Tai and CDL jointly bought the 112,098 sq ft site – which was the former Anderson 18 – for $477.7 million or about $1,650 per sq ft (psf) per plot ratio.
Wing Tai would have started incurring QC extension fees for the luxury condo Le Nouvel Ardmore in Ardmore Park earlier this year as the project received its temporary occupation permit in April 2014.
Wing Tai has sold about six of the 43 units at Le Nouvel Ardmore, where prices are around $4,000 psf.
CDL said yesterday it is “exploring ways to optimise and unlock the value of (Nouvel 18), including via sales of individual units, bulk sales or a capital markets transaction”.
CDL executive chairman Kwek Leng Beng previously said it was considering converting part of the project into serviced apartments, although it later emerged that QC sales deadlines would still apply.
The acquisition of the Wing Tai stake was funded via internal resources, CDL said. The acquisition is not expected to have any material impact on the net tangible assets or earnings of the group for the financial year to Dec 31.
CDL said both firms had “considered various ways to optimise their interests in Summervale… and agreed that the consolidation of the equity interests under one party would provide flexibility”.