The disputed Singapore Capitol
Singapore’s normally placid business circles were shaken and stirred last week when listed firm Perennial Real Estate Holdings disclosed that it has gone to court to wind up three of its subsidiaries linked to Capitol Singapore, an iconic redevelopment project in the heart of the downtown district at City Hall.
The reason for this drastic step, as cited by Perennial, was a “deadlock ” between Capitol’s shareholders such that they could not “ realistically continue to work together constructively.” The proposed liquidation of one of the island state’s most talked about projects, marks the inglorious end of a partnership between two powerful clans-the Kuoks and the Kwees.
Perennial, which owns 50% of Capitol Singapore, is backed by billionaire Kuok Khoon Hong, the Singapore-based nephew of Malaysia’s richest person, Robert Kuok. (Ron Sim, founder of home massage-chair maker OSIM International is also a shareholder.) The remaining 50% is owned by Chesham Properties, part of the privately held Pontiac land Group, owned by the Kwee family.
Kuok Khoon Hong (Photographer: Charles Pertwee/Bloomberg)
Perennial has said it is willing to take full control of Capitol or sell its share to either the Kwees or a third party. The winding up petition is expected to result in a court-appointed liquidator temporarily taking charge of the project. While reports in local newspapers have alluded to differences on “key issues”, no precise details on the dispute have been cited.
The Capitol Singapore project was awarded by the government in October 2010 to the consortium consisting of Perennial, Chesham and Top Global, a firm controlled by Sukmawati Widjaja , daughter of Indonesian tycoon Eka Tjipta Widjaja. (Subsequently, in 2012, Top Global sold its stake to the Kwees and Sim) “With such strong partners behind it, the government thought the project was bullet-proof,” says a property tycoon who did not wish to be named.
The project, which drew 14 bids, including from the Ng family’s Far East Organization, was auctioned through a ‘concept and price revenue’ tender process. While the winning consortium’s $200 million bid wasn’t the highest, it scored top marks in meeting, as a government release then noted, “ the high standards expected in terms of use, concept, quality of architecture, and sensitive adaptive reuse of the conserved buildings.”
The Capitol project involved an investment of $600 million and the redevelopment of three heritage properties: Capitol Theatre, Capitol Building and Stamford House. It consists of a retail mall (Capitol Piazza), luxury condos (Eden Residences), the 970-seat single screen Capitol theater and a 157-room uber luxury hotel (The Patina).
While Perennial oversaw the retail side, the Kwees, known for their architecturally distinct properties, were focused on creating The Patina, with the help of Pritzker Prize winning architect Richard Meier. Though the hotel has still to open, the retail complex opened in phases starting last year but has been facing problems attracting adequate footfalls as well as tenants.