Tuesday, March 9, 2010

OCBC in fresh talks on Orchard Road site

THE on-again, off-again redevelopment of the prime Specialists’ Shopping Centre and Hotel Phoenix site in Orchard Road is back on the agenda after a two-year break.

OCBC Bank announced yesterday that it is in talks with construction and property group United Engineers Limited (UEL) to build a hotel and mall on the land.

But the original player lined up for the project – the Straits Trading Company – is out. It had announced in January 2008 that it was in ‘advanced negotiations’ with OCBC about redeveloping the land.

OCBC’s group corporate communications head, Ms Koh Ching Ching, told The Straits Times yesterday that negotiations with Straits Trading were discontinued after the last announcement in 2008.

‘We subsequently received indications of interest from other potential parties and we decided to enter into discussions with United Engineers,’ she added.

The original proposal called for a 21-storey complex with shops and a 580-room hotel with construction slated to begin in the second half of 2008. It was to be linked to the nearby Orchard Central and 313@Somerset malls.

Straits Trading, a holding company with businesses ranging from smelting and mining to hotel investment and property development, was the target of a bidding war in 2008.

The Tecity Group eventually succeeded in taking over Straits Trading.

It also holds 12 per cent of UEL’s shares after Straits Trading transferred its entire stake to the parent company in May last year.

Tecity is controlled by the family of the late Tan Chin Tuan, a past chairman of OCBC. Dr Tan set up Tecity, which had held a stake in Straits Trading since the 1950s.

Dr Tan also started the old 392-room Hotel Phoenix, which closed in August 2007 after 35 years. It has since been demolished.

OCBC said the site is one of its long-term investments.

It added yesterday: ‘Proposed arrangements will enable OCBC Bank to rely on UEL’s financial resources and expertise to complete the proposed redevelopment and construction project.’

The terms of the arrangements are still being negotiated so another announcement will be made if a deal is struck, OCBC said.

Mainboard-listed United Engineers reported a net profit of $52.2 million for last year, a significant jump from $6 million in 2008.

Its projects include residential developments such as The Rochester@One North in Buona Vista and Park Central@AMK in Ang Mo Kio.

Source: Straits Times, 9 Mar 2010

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