In a significant development within Singapore's thriving biomedical real estate market, Ho Bee Land has announced the sale of a 49% stake in its property, Elementum. This strategic transaction, valued at $134.0 million, marks a pivotal moment for the company and underscores the growing interest in Singapore's life sciences sector.
On August 8, Ho Bee Land's wholly-owned subsidiary, HB Universal, entered into a sale and purchase agreement (SPA) with Fermium 257, a Singapore-incorporated entity representing a sovereign wealth fund. The deal, based on an agreed property consideration of $555 million, will be fully settled in cash.
Elementum, formerly known as Biopolis P6, is a state-of-the-art 12-storey biomedical sciences development located at 1 North Buona Vista Link. Boasting a gross floor area (GFA) of 445,300 sq ft, this property is a testament to Singapore's commitment to fostering innovation in the life sciences sector.
Nicholas Chua, CEO of Ho Bee Land, expressed enthusiasm about the partnership, stating, "The life sciences sector has witnessed unprecedented growth in recent years, and we are pleased to enter into a strategic partnership with the SWF. They bring a wealth of experience, and we are well-positioned to explore new growth opportunities together, strengthening our commitment to innovation and excellence."
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The transaction structure involves Fermium acquiring its stake through shares in HB Universal, a private limited company with an issued and paid-up share capital of 144.12 million shares. As of August 12, Fermium had already paid $2.7 million, representing 2.0% of the purchase consideration, with the balance due upon completion of the sale, expected on August 21.
This deal comes after Ho Bee Land's successful bid for the property in March 2020, when it secured the land tender for $223.6 million. Despite the partial stake sale, Ho Bee Land reaffirms its commitment to holding Elementum as a long-term investment for recurring income, aligning with its initial intentions stated in a 2020 interview with Business Times.
The company's August 12 statement emphasizes that this partnership extends beyond the immediate investment, potentially opening doors for broader collaboration and exploring new avenues for strategic growth and development in the biomedical sector.
As Singapore continues to position itself as a global hub for biomedical sciences, this transaction reflects the increasing attractiveness of such specialized properties to international investors. It also highlights Ho Bee Land's strategic approach to balancing its portfolio while maintaining a solid foothold in this high-growth sector.
The market responded positively to this news, with Ho Bee Land's shares closing at $1.79 on August 8, the day the SPA was signed.