CDL Hospitality Trusts (CDLHT) has completed the sale of its entire stake in Novotel Singapore Clarke Quay, while Ascott Residence Trust (ART) has sold its interest in the land which includes Somerset Liang Court Singapore.
These form part of the transaction for the Liang Court site’s redevelopment – by a consortium comprising real estate heavyweights CapitaLand Limited, City Developments Limited (CDL) and ART – that was announced last November. On the site sits Liang Court mall, mid-scale hotel Novotel and serviced residence Somerset Liang Court Singapore.
CDLHT was to sell Novotel to the 50:50 CDL-CapitaLand joint ventures and CDL. At the same time, ART would sell 15,170 square metres (sq m) in gross floor area (GFA) of the serviced residence to CDL and retain 13,034 sq m of GFA.
In a filing on Wednesday evening, CDLHT said it completed the Novotel divestment for about S$375.9 million, to the redevelopment entities Gemini One Trust, Legend Quay and Legend Commercial Trust.
CDLHT said the total cost of the divestment was about S$5.5 million, which included winding down related costs from the closure of the hotel.
Net proceeds are about S$370.3 million. The CDLHT managers plan to use about S$342.2 million of this amount to fund its acquisition of the W Singapore luxury hotel in Sentosa Cove by paying down the short-term borrowings. The managers had announced in November that CDLHT would buy W Singapore from a CDL subsidiary.
About S$26.8 million of the net proceeds from the Novotel sale will go into repaying existing debt and/or to make distributions to CDLHT security holders, and S$1.4 million will be used to pay professional fees and other expenses for the forward purchase.
CDLHT, an associate of CDL, will own the new hotel on the redeveloped Liang Court site under a forward purchase agreement.
As for ART, it completed the sale of the interest in the serviced residence at 177 River Valley Road on Wednesday, and has received the sale price of about S$163.3 million in cash from the buyer, Gemini One Trust.
On the same day, the ultimate owners – ART’s trustee, Gemini One Trust and two associated companies of CapitaLand – signed a joint development deed to undertake, among other things, the development of the respective components of the project.
The upcoming mixed-use development will include a new serviced residence property with a hotel licence, which will be fully owned by ART.