PoMo sold for $336m to Enviro-Hub JV

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[SINGAPORE] PoMo, a retail and office development along Selegie Road, has changed hands for $336 million.

The buyer is a joint venture between BS Capital Pte Ltd and Enviro-Hub Holdings Ltd, called EH Property and Investments Pte Ltd. And the seller is a vehicle controlled by CLSA Capital Partners.

The vehicle acquired the property in 2011 for $255 million from Lend Lease and Silverpeak Real Estate Partners.

Formerly known as Paradiz Centre, PoMo is on a site with a remaining lease term of 69 years. The price reflects a price of $1,894 per square foot based on a net lettable area 177,381 sq ft.

This NLA comprises 75,715 sq ft of retail space (from basement 1 to the third level) and 101,666 sq ft of offices from levels 4 to 9. According to sources, education provider Kaplan is expected to move into the offices later this year.

Some of the retail space is vacant, which leaves room for the new owners to reposition the asset, note market watchers.

PoMo is on a site with land area of 43,027 sq ft. Under Master Plan 2008, the site is zoned for commercial use with a 5.4 plot ratio (ratio of maximum gross floor area to land area), which has already been tapped.

BS Capital is owned by Raymond Ng Ah Hua, a controlling shareholder and the executive chairman of Enviro-Hub Holdings.

In a late night filing on Tuesday with the Singapore Exchange, Enviro-Hub said that EH - its 51:49 joint venture with BS Capital - is acquiring the entire issued and paid-up share capital of F2S1 Investment Pte Ltd from Aceland Investment Ltd. FS21 owns PoMo.

Enviro-Hub said that the acquisition of PoMo was subject to shareholder approval.

Enviro-Hub's existing core businesses include recycling, recovery and refining of precious metals, trading of electronic waste and precious metals, recycling of plastics and conversion of waste plastics to fuel, and provision of property construction-related services such as piling and rental of cranes and heavy machinery for the construction industry.

The group holds minority stakes in the related businesses of property investment and development.

In its filing with SGX, Enviro-Hub also said that the joint venture was in line with the group's strategic plans and ongoing efforts to pursue suitable new investment opportunities, and "will give the group further exposure to the property sector, and enable the group to expand its revenue base so that it is not dependent entirely on its current core businesses for its revenue".

After careful consideration of the prospects of the proposed joint venture, the board is of the view that the tie-up will provide an additional source of revenue for the group and is thus in the group's best interest, it added.

Source: Business Times, 27 Jun 2013 

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Recycling company latest to eye property sector

THE promise of real estate riches has lured yet another non-property firm to venture into the sector.

Recycling company Enviro- hub Holdings told the Singapore Exchange on Tuesday that its subsidiary plans to buy a Cayman Islands company that owns the PoMo mall in Selegie Road.

It will pay $164.5 million, a sum arrived at by deducting the firm's bank liabilities of $165.75 million and the net value of its other assets, worth $5.7 million, from an initial amount of $336 million.

It did not say what these other assets were.

Enviro-hub did not specify if the initial $336 million figure was based just on the value of PoMo mall, which is held by a Cayman Islands-incorporated firm called F2S1 Investment.

It said in the SGX statement that it already holds minority stakes in businesses engaging in property investment and development and wanted to "explore opportunities in other areas of businesses with good prospects for growth in the long run".

The acquisition is expected to be completed on Oct 18 but is subject to shareholder approval at an extraordinary general meeting.

News of the planned purchase sent Enviro-hub's stock down 1.2 cents to 11.5 cents yesterday, on turnover of 398 million units.

The announcement followed an earlier statement on Tuesday by shipping firm Courage Marine, which said it would diversify into property investment, citing a weak freight market.

Enviro-hub said the 10-storey PoMo, formerly Paradiz Centre, was valued at $273 million as at Dec 31 last year.

This translates to about $1,539 psf based on a net lettable area of around 177,381 sq ft.

The mall, which has a 99-year lease beginning March 1983, sits on a land area of 43,027 sq ft. It has changed hands several times over the past few years.

It was formerly owned by Australian property investment group Lend Lease and Silverpeak Real Estate Partners.

They sold it in March 2011 to CLSA Capital Partners for $255 million, which translated to around $1,400 psf based on a net lettable area of 182,060 sq ft at that time.

It is unclear whether F2S1 Investment is a CLSA unit.

The firm had a book value of nearly $116.9 million and net profit after tax of around $7.4 million as at Dec 31 last year.

Enviro-hub is buying F2S1 through its 51-per-cent-owned joint venture EH Property.

The remaining 49 per cent of the joint venture is held by Enviro-hub executive chairman Raymond Ng.

Enviro-hub said last October that its unit HCG Environment had secured the rights to buy a property at Tuas View Circuit for $8.4 million, consisting of covered warehouses and staff dormitories.

MELISSA TAN

Source: Straits Times, 26 Jun 2013