City Developments Limited (CDL) has purchased its partner’s half-share in their equal joint venture firm that owns the Futura condominium site located at Singapore’s Leonie Hill.
Together with El Ad Group, CDL bought the residential freehold property at $287.3 million or $1,179 per square foot in October of 2006.
In Tuesday’s statutory filing with the Singapore Exchange, CDL stated that the cash consideration involved in the purchase of Elad’s half-share is an amount discounted from the latter’s aggregate capital contributions to K-El Sun Investments, the two partners’ joint venture firm. CDL further said that the purchase value was based on a willing-buyer-willing-seller basis.
“Elad remains our partner in the South Beach consortium,” a spokeswoman for CDL said in reply to queries from a Business Times correspondent regarding the status of the firm’s other joint business venture with the El Ad Group, a US-based firm owned by Yitzhak Tshuva of Israel.
In December 2008, Business Times reported that El Ad Group was believed to be in search of buyers for the real estate development conglomerate’s half-share in Futura and its one-third ownership share in a project at South Beach.
During the property market’s bull run in 2007, CDL, Dubai World and El Ad teamed up to acquire the South Beach site for approximately $1.69 billion during a state tender. The three business entities equally hold shares for the said site which is located opposite Raffles Hotel.
In November 2008, CDL made an announcement regarding a deferral of the development’s construction until expenses for the venture ease up. The development was originally scheduled for completion in 2012. The consortium, though, has until 2016 to finish the project pursuant to the 99-year lease site’s sales terms.
In August 2009, Kwek Leng Beng, the executive chairman at CDL, said that the construction of the South Beach project will probably resume sometime in the third quarter of 2010. He further said that CDL and Hong Kong-based developer Nan Fung, which became an investor to the project in June 2009, will likely inject more money to the South Beach venture. The share of both Dubai World and El Ad in the project might be subsequently diluted as they will probably be passive investors.
“I think they have other priorities,” Kwek was quoted in a statement last month.