The buyers: A good deal that turned sour

While the sellers are probably bearing the brunt of the failed sale, the buyers - HPL, Morgan Stanley Real Estate and Qatar Investment Authority - are far from happy either.

The consortium thought it had bagged a good deal when it inked the deal to buy the estate for $500 million, or $800 per sq ft, at the start of the huge property upswing. Within six months of the sale, Horizon Towers' value had doubled on paper.

But the profits the buyers envisioned never materialised.

Instead, HPL and its partners found themselves dragged through legal brawl after legal brawl as owners who objected to the sale vigorously contested it.

HPL, a property and hospitality group, is run by Singaporean tycoon Ong Beng Seng. It was expected to develop a super-luxury block of apartments on the Horizon Towers plot. Indeed, soon after the purchase, HPL's stock price shot up as the luxury property market boomed.

But the sale kept running into snags. A mediation session was organised by the Strata Titles Board (STB) but failed to reach a satisfactory conclusion, leading to the formation of a formal STB tribunal. STB rejected the sale on a technicality, prompting the HPL consortium to sue the majority sellers for lost profits.

The majority sellers scrambled to fix the deal, taking the case up to the High Court. High Court judge Choo Han Teck threw out the STB decision to abort the sale in October 2007, leading the STB to finally approve it. The buyers' luck continued when the minority owners appealed to the High Court against the STB approval and lost.

But then the minority owners' last-ditch attempt to block the sale - culminating in the Court of Appeal judgment last Thursday - finally put the last nail in the coffin of the Horizon Towers deal.

Now the buyers are an estimated few million dollars out of pocket in legal fees - with no land to show for it.

Then again, in today's property slump, that may not be such a bad thing after all.

'Prices are back to about the 2007 level, which was when HPL closed the deal,' said Mr Nicholas Mak, director of research and consultancy at Knight Frank. 'Now that developers want to offload their assets and trim their debt, losing this site may be a blessing in disguise.'

Source: Straits Times, 5 April 2009