Pacific Eagle Real Estate has agreed to buy the Tanglin Shopping Centre in Singapore’s Orchard Road shopping belt for S$868 million ($645 million) as the developer controlled by Indonesian billionaire Sukanto Tanoto steps up its real estate investments in the Asian financial hub.
“Tanglin Shopping Centre is one of Singapore’s earliest retail landmarks and occupies a prominent location right next to the St. Regis Hotel in the Orchard Road enclave,” Sun You Ning, director of Singapore-based Pacific Eagle, said in a statement. “Pacific Eagle is honored to have the opportunity to create an iconic development befitting the property’s heritage and its frontage along one of (Singapore’s) most important streets.”
Built in the 1970s, the 12-story Tanglin Shopping Centre sits on a 68,512 square feet freehold land plot along Tanglin Road and Cuscaden Road near renowned medical establishments such as Camden Medical Centre and Gleneagles Hospital as well as exclusive private clubs such as the Tanglin Club and the American Club. The property can be redeveloped into a commercial development, with a maximum height of 20 stories and an allowable gross plot ratio of 4.2 times, according to Savills Singapore, which brokered the deal.
“The tender for Tanglin Shopping Centre was keenly contested,” Jeremy Lake, managing director of investment sales and capital markets at Savills Singapore, said in a statement. “The key appeal of the site is it being a freehold commercial site, which allows the flexibility of various development options.”
Billionaire Kwek Leng Beng’s City Developments, which owns about 34.6% of the strata titled units at the commercial complex through its indirect wholly-owned subsidiary King’s Tanglin Shopping, is among the parties selling its stake in the shopping mall. The divestment “is in line with our capital recycling initiatives to unlock the potential of our asset portfolio and maximise shareholder value,” City Developments group CEO Sherman Kwek said in a separate statement.
Pacific Eagle—part of the Tanoto family’s RGE group of companies—has been making inroads in the Singapore real estate market in recent years. In 2018, the group bought the Chinatown Plaza in the Tanjong Pagar district near the Raffles Place business district for S$230 million. The property is now being redeveloped into Mondrian Singapore Duxton, a luxury hotel that will combine architecture from Singapore’s centuries-old shophouses with contemporary influences. Pacific Eagle recently purchased a building near the Botanic Gardens, which it also plans to redevelop.
Tanoto, 72, founded RGE more than 50 years ago when he opened a humble spare parts supply shop known as Toko Motor in Medan, Indonesia. The business has since evolved into a global company with over 60,000 employees and operations spanning pulp and paper, palm oil and energy. His Bracell is one of the largest producers of specialty cellulose, used in everything from baby wipes to ice cream. With a net worth of $2.1 billion, Tanoto was ranked No. 21 on the list of Indonesia’s 50 Richest when the ranking was published in December.