Hongkong Land Selling MCL Land Singapore Unit to Malaysia’s Sunway for $579M

Just under a year after vowing to transform itself from a builder to a fund manager and exit its residential development business, Hongkong Land has agreed to sell its primary Singapore subsidiary for S$739 million ($579 million), according to an announcement on Thursday.

The landlord known for its portfolio of grade A offices in Hong Kong’s Central district, is selling MCL Land to Malaysia’s Sunway Group as part of a plan to focus on high-end commercial properties around the region and to raise capital for other ventures, it said in a statement. 

“Since announcing our new strategy last October, we have looked for the right steward for MCL Land and its people,” said Hongkong Land chief executive Michael Smith. “This is a business Hongkong Land has grown for over thirty years, with a strong brand known for quality and a robust residential development pipeline.”

For Sunway, which has added multiple Singapore land plots to its pipeline in the city-state over the last year, the transaction provides the Malaysian builder with the opportunity to take over a respected residential builder in Southeast Asia’s most expensive housing market while also expanding in its home market.

Singapore Expansion

“This acquisition marks a decisive expansion of our footprint in one of Asia’s most competitive property markets. With 20 years of property experience in Singapore, coupled with our recent investments, including the Chuan Grove sites, it underscores our confidence in Singapore’s long-term fundamentals and our commitment to scale with purpose,” said Sunway Group executive deputy chairman Paduka Sarena Cheah.

Described by Sunway as its largest transaction to date, the deal will give the KLSE-listed builder ownership of MCL Land and its subsidiaries, including ongoing development projects in Singapore as well as its portfolio of income-generating and development assets in Malaysia, according to Sunway’s statement. 

Those Singapore assets include five ongoing developments which Sunway says will boost its unbilled sales in the city-state from S$614 million to almost S$1.8 billion. That set of projects  comprise approximately 2,700 units worth some S$2.9 billion in gross development value. 

“By integrating MCL Land’s deep market expertise with Sunway’s track record in sustainable, mixed-use developments, we are building a robust platform to accelerate growth, not only in Singapore but across key regional markets,” Cheah added.

In 2022 MCL Land purchased a 49 percent stake in a luxury condo project in Singapore’s Tanjong Katong area from local titan City Developments Ltd for an undisclosed amount. Now dubbed Tembusu Grand, that project sold 53 percent of its 638 units on launch weekend at an average of S$2,465 per square foot, according to company statements at the time.

Sunway has been expanding aggressively in Singapore, including teaming up with local player Sing Holdings earlier this month to win a residential site in the Chuan Grove area for S$623.9 million. That plot is expected to be combined with a neighbouring Chuan Grove project which the partners acquired in July. 

In September of last year a Sunway joint venture with local builder Hoi Hup acquired a Housing Development Board site in Singapore’s Tampines area for S$668.28 million which is expected to yield nearly 600 homes.

The deal also hands over to Sunway MCL Land’s Wangsa Walk Mall in Kuala Lumpur at yield of 6.4 percent on a projected NPI basis, as well as land bank in Wangsa Maju and the Forest Heights township in Seremban, Malaysia, which Sunway sees becoming part of its masterplanned community pipeline.

Sunway is paying cash to acquire MCL Land at its net asset value of S$739 million, according to Hongkong Land, with the deal expect to close before the end of 2025. 

Raising Cash

The unit of Jardine Matheson noted that it has raised $2 billion in funds since last year, putting it halfway toward its target of achieving at least $4 billion in exits by the end of 2027.

“This transaction sees us continue to sharpen our portfolio focus and recycle capital into what we do best, which is developing and managing ultra-premium integrated commercial properties in Asian gateway cities,” Hongkong Land’s Smith said. “We will keep investing in the unique, world class commercial property assets we have in Singapore, a market that is central to Hongkong Land’s future as we deliver on our strategic vision.”

Hongkong Land was first reported to be exploring a sale of MCL Land in early December last year, less than two months after Smith had announced plans to transform the company.

As rents and property valuations declined in its hometown last year, Hongkong Land reported an attributable loss of $1.39 billion for 2024. For the first half of this year the company reported a profit of $221 million, reversing a year-earlier loss of $833 million. That improved performance was attributed primarily to stabilising office values in Hong Kong.