Paragon Shopping Centre on Crown Jewelry Orchard Road, Paragon REIT.
Provided by Paragon REIT
Cuscaden Peak Investments, returned by Singapore State along with state-owned investor Temasek Holdings, is seeking to privatize Paragon Reit for a valuation of S$2.8 billion (US$2.1 billion).
According to the deal, Times Properties, a wholly owned subsidiary of Kuscaden, is making a purchase of the rest of Singapore-listed Paragon REIT, which does not own S$0.98, or about 10% from its closing price on Monday.
The deal allowed investors to exit the risk and volatility of the flagship Paragon shopping mall that could upgrade REIT, which could require up to S$600 million in investment.
“Given the increasingly competitive retail landscape, we believe Paragon's major asset enhancement program is expected to be the first to be a part of the world,” Cuscaden CEO Gerald Yong said in a statement. It is necessary to keep Singapore’s leading premium retail malls competitive.”
With the assets of Tycoon Mengshang's Hotel and the support of Tyminsk's CLA Real Estate Holdings and Mapletree Fortrest, Cuscaden purchased Singapore Press's REIT (which has since been renamed Paragon REIT) in 2022, beating for $3.9 billion, with the support of Tymins Mung Sang's Hotel and CLA Real Estate Holdings and Mapletree Fortrest BID of competitors and beat BID of competitors -RIG Builder and Property Developer Keppel Corp.
Paragon said in a regulatory filing last month that the Tiga star of hotel real estate is no longer a shareholder in Cuscaden. Financial details are not disclosed. The move will allow hotel properties to “focus resources on the development of their other assets and projects,” the document said.
The largest project in hotel real estate is the proposed redevelopment of three adjacent main properties on Orchard Road, with analysts estimated prices to be as high as S$2 billion. It has been approved to build hotel, retail, office and residential complexes on site at 14,027 square meters occupied by the voco hotel, forum shopping center and HPL House.
The hotel real estate project is one of Cuscaden's upcoming reconstruction projects, which is a challenge to Paragon's main position in the Orchard Road Shopping District.
Paragon Reit said the privatisation of Paragon REIT will promote “a major asset enhancement program for the future Paragon,” which accounts for 72% of the value of REIT and faces growing competition from nearby shopping malls. It added that the upgrade could take “a few years” and that privatization would lift investors out of execution risks.
The Paragon shopping mall opened in 1986, with its last upgrade when its rival Ion Mall opened in 2009. The adjacent Ngee Ann City and Wisma Atria shopping complex have been renovated in 2023. The shops in Marina Bay Sands are undergoing a S$8 billion makeover.
