Wheelock snaps up 10% of rival SC Global for $112m

 

DEVELOPER Wheelock Properties has taken a stake in competitor SC Global, more than a year after it bought into another property firm, Hotel Properties (HPL).

 

Wheelock said yesterday that it has paid $112.1 million for 10 per cent of SC Global, a high-end boutique developer.

 

This works out to $6 per share, a discount of about 7.5 per cent to SC Global's last traded share price of $6.45 yesterday.

 

The stake was sold by Roveron, one of SC Global chairman Simon Cheong's private investment firms.

 

Wheelock chief executive David Lawrence was not available for comment, but the firm said in a statement that the acquisition 'is intended to be for long-term investment in a well-managed and respected Singapore property company'.

 

Property analysts said the purchase bodes well for SC Global, as Wheelock is known to have a good eye for investments.

 

It reaped more than $400 million from its acquisition of a 21 per cent stake in HPL in March last year, for example.

 

Wheelock paid $171.4 million, or $1.80 per share at the time. The counter has since surged to $6.15, making Wheelock's stake now worth about $585.6 million.

 

'Wheelock has always illustrated an eye for the market in terms of buying land,' said one analyst.

 

'Their investment in HPL has also turned out very well, so this purchase could be good for SC Global, given that Wheelock could see further upside for the company.'

 

SC Global shares have more than doubled since the beginning of the year, from $2.60 to $6.45.

 

Industry experts also said the acquisition may lead to tie-ups between Wheelock and SC Global in developing sites, as both have experience in high-end developments and own land in the exclusive enclave of Ardmore Park.

 

Wheelock bought Ardmore Point and Habitat One in Ardmore Park last year, while SC Global picked up nearby The Ardmore last weekend.

 

However, a veteran market player added that Wheelock will 'probably be a more passive investor' in SC Global, following the model it has taken with the HPL stake.

 

'There was speculation that Wheelock would tie up with HPL when it bought the stake last year, but so far it has just sat on the investment,' he said.

 

Wheelock's buy of the SC Global stake may simply be a way for it to strengthen its exposure to the booming market, said the analyst.

 

'It's very hard to buy sites right now, and one way to gain leverage on the sector is to buy into other property companies,' he said.

 

'Blocks of stocks like this one are also hard to come by in this current climate, so it's no surprise that Wheelock snapped it up.'

 

Wheelock will fund the acquisition through internal funds.

 

The move is not expected to have a material impact on the company's current financial year.

 

 Wheelock shares added two cents yesterday to close at $3.40.