Vibrant taking majority stake in Cecil House

CECIL House is changing hands, through a sale of shares in the company that owns the property. The deal values the 11-storey office block on a site with a balance lease term of about 66 years, at $110 million. Vibrant Group, formerly known as Freight Links Express, is teaming up with DB2 Group to purchase Cecil House from Cheong Sim Lam, whose family developed International Plaza in the 1970s.

In a filing with the Singapore Exchange yesterday, Vibrant said it has subscribed for a 51 per cent stake in the share capital of Shentoncil Pte Ltd, which has entered into a sale and purchase agreement with Mr Cheong to acquire 100 per cent of the share capital of Ececil Pte Ltd, the owner of Cecil House.

A company search listed Shentoncil's shareholders as Dennis Leong Chee Seng and Tan Swee Meng. The two are also known to be shareholders of property group DB2.

Industry sources believe that Mr Cheong gained control of Cecil House at 139 Cecil Street and the adjacent 137 Cecil Street, formerly known as Aviva Building, from Yi Kai Group and Fission Group shortly after the duo teamed up to acquire the two properties in July 2009 for $100.8 million. They paid $35.8 million for Cecil House and $65 million for the former Aviva Building.

Market watchers could not ascertain the price Mr Cheong paid Yi Kai and Fission since that transaction was through a sale of shares.In June 2010, when Ececil received provisional permission from Urban Redeveloment Authority to redevelop the two adjoining office blocks into a new residential project with 227 apartments, Mr Cheong's name was already listed as Ececil's sole shareholder.

However, Mr Cheong has not embarked on redeveloping the two buildings.

Going by Vibrant's statement to the SGX yesterday, it is also not planning to redevelop Cecil House. Rather it plans to refurbish the property. The group views the proposed acquisition as a good property investment and intends to maximise the gross floor area through upgrading and retrofitting work...The property has the inherent quality of a good location and can be held as an investment for rental and capital appreciation, it said.

Based on earlier reports, Cecil House has around 20,000 sq ft unutilised GFA.

The stock of Vibrant closed trading yesterday unchanged at 10.3 cents.

Source: Business Times, 20 Jun 2014