ST : OCBC plans for Orchard Rd site confirmed at last

Jun 8, 2010

OCBC plans for Orchard Rd site confirmed at last

By Harsha Jethnani

ON-AGAIN, off-again plans for the redevelopment of the prime Specialists' Shopping Centre and Hotel Phoenix site into a hotel-cum-retail mall have finally been wrapped up.

The site's owner, OCBC Bank, made the announcement yesterday after more than two years of uncertainty over the site's fate. OCBC said it had appointed mainboard-listed United Engineers Ltd (UEL) to undertake the redevelopment.

The bank had said in March that it was in talks with UEL and that the site was one of its long-term investments.

Confirmation of the development follows major redevelopment of the surrounding prime area, including the 313@Somerset and Orchard Central projects.

UEL will be the developer for the project and will arrange project financing, a statement from OCBC said.

The Specialists' Shopping Centre and Hotel Phoenix have both been demolished. The hotel closed in August 2007 after 35 years.

The estimated $550 million development will be built in two phases, both expected to be completed by the second half of 2013.

UEL said in an announcement yesterday that Phase 1 will entail the construction of the new hotel, shopping mall and a pedestrian bridge, and Phase 2 will involve building an underpass.

Both the bridge and underpass will link the new development to the former Orchard Emerald site, owned by the Great Eastern Life group and located across the road from the Specialists' Shopping Centre site.

UEL will be financing the project through the incorporation of two special purpose wholly owned units - UE Orchard for Phase 1 and UE Somerset for Phase 2.

The former will have an issued share capital of $500,000 and the latter of $200,000, the UEL announcement said.

OCBC has also entered into a sales and purchase agreement with UEL to purchase the issued shares and outstanding shareholders' loans in both units upon the project's completion.

Originally in talks with OCBC to redevelop the site was the Straits Trading Company. But despite talks which were in advanced stages in early 2008, the arrangement did not proceed.

Tecity Group - controlled by the family of the late Tan Chin Tuan, a former chairman of OCBC Bank - had taken over Straits Trading, originally part of OCBC and the Lee family, in the same year.

Tecity now holds 12 per cent of UEL after Straits Trading transferred its entire stake to the group in May last year.

Straits Trading is a holding company with businesses ranging from smelting and mining to hotel investment and property management.