Indonesian family in exclusive due diligence to buy 22 units at Draycott Eight: sources
Indonesian family in exclusive due diligence to buy 22 units at Draycott Eight: sources. A STACK of 22 apartments at the Draycott Eight condominium in prime District 10 may be for sale.
According to The Business Times, an Indonesian family is in exclusive negotiations with Angelo Gordon, a US-based private equity firm, to purchase the units for a total of nearly S$168 million.
According to sources, the price works out to slightly less than S$2,570 per square foot based on a total strata area of 65,401 sq ft. Draycott Eight is a 136-unit condominium on a site with a leasehold tenure of approximately 74 years. It was granted a Temporary Occupation Permit in 2005.
Angelo Gordon’s 22 units include 21 four-bedroom apartments, the majority of which are around 2,900 square feet, and a duplex penthouse measuring 4,069 square feet.
The units are fully leased, with a rental income of approximately 2.5 percent gross yield on a S$168 million purchase price. Given the current tight leasing market for large, 4-bedroom units of 3,000 sq ft and above in the posh Ardmore/Draycott location, observers believe the units have the potential to command higher rents upon lease renewal.
The buyer is believed to be represented by Michelle Lek of Quillion Global, a real estate investment advisory firm serving ultra-high-net-worth clients.
Angelo Gordon is believed to have purchased the units in 2017 for less than S$2,000 per square foot from an Alpha Investment Partners-managed fund.
Wing Tai developed Draycott Eight on a 99-year leasehold site that it won in an Urban Redevelopment Authority tender in June 1997, just before the Asian Financial Crisis erupted.
Its winning bid for the prime location came to S$1,103.60 per square foot per plot ratio (psf ppr).
The project includes three 24-story residential blocks and a distinctive clubhouse housed in a large black-and-white conservation bungalow.
Wing Tai sold all 46 units in one of the blocks to Forum Capital Partners in 2006 for S$214.92 million, or S$1,572 per square foot on a total strata area of 136,716 square feet. The following year, Forum Capital sold the units to two Morgan Stanley funds, each of which purchased a stack of 23 units at the same price of S$2,600 psf. The funds sold their respective stacks at different times, but in both cases at a loss.
In 2010, one of the funds sold its 23 units to an Alpha Investment Partners-managed fund for S$2,300 per square foot, or slightly more than S$157 million. The Alpha fund sold one of the units, a 4-bedroom apartment on the eighth floor, for S$7.18 million or S$2,480 per square foot in late 2012, leaving it with the 22 units that it later sold to Angelo Gordon.
The other Morgan Stanley-managed fund sold 23 units in 2015 for S$2,180 per square foot to a vehicle controlled by Dennis Chiu’s family, an executive director of Far East Consortium International of Hong Kong.
Angelo Gordon’s 22 units are expected to be sold through a share sale in the company that owns the units.
According to market observers, the buyer is unlikely to incur additional conveyance duty (ACD) in addition to the additional buyer’s stamp duty for the purchase. The transaction may not fall under the existing provisions of the ACD legislation due to multiple layers in the existing holding structure for the asset involving Singapore as well as overseas-incorporated entities.
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