SINGAPORE (Mar 12): Perennial Real Estate Holdings (PREH) is acquiring from Chesham Properties the remaining 50% stake in three associated companies which hold the assets of Capitol Singapore.

On completion of the acquisition, Perennial shall pay Chesham and its affiliates a total of approximately $528 million. 

The associated companies are Capitol Investment Holdings, Capitol Retail Management and Capitol Hotel Management.

The three entities together hold half the assets of Capitol Singapore, an integrated development located at the junction of Stamford Road and North Bridge Road, Singapore.

Chesham Properties is an affiliate of Singapore-­based developer Pontiac Land Group.

PREH's wholly-owned subsidiaries Perennial (Capitol) and New Capitol hold the other half.

PREH says the consideration will be paid in cash upon completion of the deal and was based on a property price of $1,028 million which is 2.6% above the 2017 property valuation of $1,001.8 million.

PREH and Chesham have been unable to agree on a number of key issues relating to the Capitol project.

See: Perennial Real Estate wants break from partner Chesham over Capitol project disagreements

In April last year, PREH said the Capitol project has become increasingly deadlocked at both the board and shareholder levels.

PREH said the state of affairs was not conducive to the business interests of the Capitol project and their respective shareholders.

“It is therefore necessary for the shareholders to disengage from the joint enterprise, such that the Capitol Project is ultimately fully controlled by either shareholder, or by a third party buyer,” adds PREH in its filing last year.

The consideration will be paid in cash and will be funded by the group’s internal resources and borrowings.

Shares in PREH last traded at 86 cents on Friday.