South Beach project back on track after securing S$1.2b in fresh funds

The iconic South Beach development project along Beach Road is back on track, after a City Developments-led consortium secured S$1.2 billion in new funds.

The South Beach Consortium will get money in the form of an S$800 million bank loan, and S$400 million in secured convertible notes.

The South Beach project came about after a hot contest for a land parcel at Beach Road.

The South Beach consortium, led by City Developments, eventually trounced the competition with its bid of S$1.68 billion for the 3.5-hectare site.

The new development is estimated to cost around S$2.5 billion.

It would include two towers of over 40 storeys each, as well as some conserved military buildings of the old Beach Road Camp which would have to be restored.

The plan is to have premium office space, two hotels, shops and residential units.

But last November, the consortium announced that it was delaying the project due to the economic turmoil and high construction costs.

It said it would wait until building costs fell to what it felt were “reasonable levels”.

Some analysts saw it as an inability to raise sufficient funds for the massive project due to the global credit crunch late last year.

But the crunch appears to be over.

The consortium has now secured a two-year loan of S$800 million through Singapore’s three local banks, as well as HSBC and Sumitomo Mitsui Banking Corporation.

The S$400 million secured convertible notes will be subscribed by four investors.

CDL will take up S$195 million, while the rest will be subscribed by a new partner, Hong Kong-based Nan Fung Group, one of the region’s leading property developers.

The funds will be used to refinance a S$1.2 billion bridging loan facility maturing this month.

The South Beach consortium has up to 2016 to complete the development under terms signed with the government.

Source : Channel NewsAsia – 9 Jun 2009

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