Amid cheers from the congregation, City Harvest Church (CHC) yesterday announced that it will pay $310 million to become a co-owner of Suntec Singapore, a prime piece of downtown real estate.
Senior pastor Kong Hee broke the news first at CHC’s service at its Jurong West building, then later at another service at the Singapore Expo in Changi.
He said CHC had acquired a ’substantial stake in a consortium company that owns 80 per cent of a joint venture fund that owns Suntec Singapore’.
The complex’s full name is Suntec Singapore International Convention and Exhibition Centre.
The $310 million includes the cost of acquiring shares in the consortium, rental costs, renovation costs and others.
Suntec Singapore was acquired by ARA Asset Management through the ARA Harmony Fund last year, with its investors comprising Suntec Reit – which holds 20 per cent – and a consortium company which holds 80 per cent.
The latter is what CHC has bought a stake in. However, CHC said it was unable to reveal its current shareholdings due to conditions stated in the agreement.
The church has spent the past five years looking for a suitable plot of land, said Dr Kong, who founded it in 1989 as a small Bible study group of 20.
Suntec was its 26th attempt after other sites such as Lion City Hotel in Tanjong Katong and Iluma in Bras Basah Road were considered unsuitable due to their small size or likely traffic congestion.
Dr Kong revealed in January this year that CHC had secured a large complex in the ‘central-south’ district that also housed shops, restaurants and a 12,000-seat auditorium. Further details were unavailable then due to a non-disclosure agreement.
Yesterday, he told his congregation he had approached Suntec’s new owners to explore the possibility of co-ownership in July last year, after an initial unsuccessful bid for the property in November 2008.
The option agreement was signed in six months, with the sale sealed on Feb 5.
The 33,000-strong megachurch is expected to move there by the second quarter of next year, after its lease at Singapore Expo expires. It will retain its Jurong West building for prayer services and Bible study.
Singaporean singer Sun Ho, who is married to Dr Kong, is also back this weekend – from Los Angeles, where she is currently based – for the celebrations.
The more than one million square feet of usable space in Suntec – equivalent to 25 soccer fields – would make it 20 times the size of the church’s premises in Jurong West and 10 times the size of the hall it currently leases at Singapore Expo, Dr Kong said.
‘This is a prime location with 78 years left in its lease. Right now we’re paying $310 million, but how much is it going to be worth 30 years from now? I have to be a good steward…to maximise every dollar our members have given,’ he said.
CHC told The Sunday Times it will be operating an ‘ownership and lease’ business model. This would allow the rent paid to Suntec Singapore to be recovered in the form of profits and dividends from space rental and tenant leases.
The church’s plan is that its share of the profit from the business will eventually be able to cover the rent, and the financing will be self-sustaining.
With the opening of the Esplanade and Promenade MRT stations on the Circle Line next month, and together with the existing City Hall MRT station, members will have easier access to its services.
In a posting on the church website, Dr Kong wrote that the project ‘allows us to move from a present expensive rental model to a more financially sustainable ownership model for the long term’.
He added that his present congregation is more than 14 times the capacity of its Jurong West building, which can accommodate only 2,300 people.
As to why the money was not spent on the poor and needy instead, Dr Kong said on the website that CHC spends 20 per cent of its annual budget on local community and overseas humanitarian work.
‘With a facility to house the church’s growing congregation and multifaceted ministries, we can serve the needs of the community in an even greater way.’
He said that while some areas will be used solely by CHC – such as the sixth and seventh storeys which will be used to house its 12,000-seater auditorium – other areas like the three ballrooms on the second floor and the exhibition halls will be open to the public for rental.
‘But as co-owners of the entire convention centre, we have a share of the annual revenues of all facilities. Every time somebody rents a room there, we get a cut for the next 78 years,’ he said.
The news coincided with the start of CHC’s fund-raising drive that hopes to raise $17.3 million from this month to June, its fifth campaign in a series of 13. It has raised $99 million in its past four campaigns.
Knight Frank group managing director Danny Yeo said the acquisition was a good alternative to buying a plot of land.
‘Existing plots of land offered by the Government are too small for the large auditorium that City Harvest is looking to build and it’s even more difficult if you’re looking for somewhere central.’
Similar plans were also announced in 2007 by New Creation Church, another large Christian group.
New Creation’s business arm Rock Productions has teamed up with mall developer CapitaMalls Asia to build an ‘integrated hub’ in Buona Vista. When ready in 2012, the $1 billion project will house shops, a concert hall and a theatre.
Source : Sunday Times – 7 Mar 2010
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