A UK opportunity real estate fund manager has stepped in to buy out Oxley Holdings’ 18.77% share in Galliard Group, London’s largest privately owned residential property developer. It has also acquired Oxley’s interests in three Galliard projects in London.
Frogmore, a private manager of UK real estate funds, is said to have sealed the deal within the last two weeks in an example of an investor making an investment at what it deems to be an attractive discounted price during the present Covid-19 crisis.
Oxley Holdings is a Singapore-listed group which is 42%-owned by Ching Chiat Kwong, once known as Singapore’s ‘shoebox king’ for building a string of compact apart condos. A colourful profile of the entrepreneur and the international expansion of Oxley can be read on Forbes.com here.
According to PropertyEU sources, Oxley has sold to Frogmore exposure to three London Galliard residential developments that are substantially pre-sold and/or with funding arrangements. They are located in Soho in central London, Nine Elms near to the new US Embassy and in Wimbledon, south west London on the site of the former Wimbledon greyhound racetrack.
In addition, Oxley has sold its 18.77% stake in Galliard Group, which it acquired in July 2015 for £50 mln (€55 mln).
The minority stake in Galliard provides Frogmore with exposure to a private group founded in 1992 that employs 700 people and owns over 8,500 residential units and hotel suites and commercial floor space across London and Southern England. Galliard’s portfolio under construction is worth £3.95 bn and includes 6,905 homes and 341 hotel suites.
It is not yet known how much Frogmore has agreed to pay for Oxley’s investments in the three projects and for the 18.77% stake, but the price is perceived as being heavily discounted by those with knowledge of the transaction.
They say the transaction would not have been attempted in March at the start of the lockdown as Covid-19 first began to wreak havoc in the market. However, some opportunity funds are now comfortable enough to invest so long as the price is attractive enough.
There have been reports that Oxley is operating under a significant debt burden, one such report published by Asian real estate outlet Mingtiani here.
It is not clear, however, how much pressure there has been to monetise investments.
Oxley has been both selling assets and making some fresh investments over the last two years.
It has been notably selling off phases of its Dublin Landings scheme in the business district of the Irish capital since March 2018. In total, it has generated around €745 mln from dispoals of long leases and blocks there, with the latest being the sale of Number 3 Dublin Landings for €115 mln in January this year.
It was not long ago that the company issued a ‘General Update on Local and Overseas Projects’ which made mention of how sales of units at a large development in Singapore had contributed to the group’s cashflow as various other construction projects progressed.
In the announcement, Chiat Kwong thanked the firm’s partners for ‘staying the course despite trying times’ and said that S$2.2 bn of revenue placed Oxley in a ‘strong position’.
The company redeemed S$150 mln worth of bonds in May, but there was no mention of needing to sell assets.
Frogmore is making the investment on behalf of its latest UK opportunity fund, Frogmore Real Estate Partners IV or FREP IV. The company held a first close on £80 mln last year with a target of £350 mln. Investors are still committing to the fund, which has reached around £135 mln. However, with the lockdown disrupting investors, the firm is to work towards a final close of the fund expected in the summer of 2021.
Source: PropertyEU 30th June 2020