Singapore Flyer snapped up for S$140 million

SINGAPORE — More than a year after it was put on the market, the Singapore Flyer, which cost S$240 million to build, has been bought at a knock-down price of S$140 million by publicly listed tourism operator Straco Corp.

While tenants welcomed the news, their optimism was tempered by a lack of familiarity with the new owner.

Receiver Ferrier Hodgson said yesterday that Straco Leisure, a subsidiary of Straco Corp, was selected from five bidders in the final round.

“Straco Leisure was the clear winner with its commercial offer, experience and vision. As a joint venture between two Singapore firms, Straco Leisure is also a fitting match for a key asset for Singapore,” said Mr Tim Reid, a partner at Ferrier Hodgson.

The deal comes three months after Merlin Entertainment, the operator of the London Eye, pulled out of talks to acquire the 165m-tall icon, which was placed under receivership 15 months ago after running into financial difficulties. Mr Reid said Merlin’s bid was “unattractive to the receivers”.

Straco Corp executive chairman Wu Hsioh Kwang said: “The Singapore Flyer represents an exciting opportunity to expand our presence in the region and contribute to the Singapore tourism industry. As a Singaporean company, we are especially proud to add this unique icon to our portfolio of high-quality assets.”

The Singapore Tourism Board yesterday said it was looking to work with Straco on plans for the Flyer.

Straco Leisure is a joint venture between Bay Attractions, a wholly-owned subsidiary of Straco Corp, and WTS Leisure.  Straco Corp manages three projects in China: The Shanghai Ocean Aquarium, Underwater World Xiamen and a cable-car service at Mount Lishan. But it is relatively unknown on its home turf. 

Still, the Flyer’s tenants whom TODAY spoke to said they hope the new landlord would improve ties with them and attract more visitors.

Mr Parmod Kumar Verma, regional general manager of SSP Singapore overseeing Popeyes Louisiana Kitchen/Robert’s Coffee and O’Learys Sports Bar & Grill, said: “The Flyer’s vision was never executed properly … I hope that, with the new landlord, it can work together with the tenants, not executing things on its own, to create plans that will enhance visitors’ experience.”

Mr Guru Singh, a supervisor at Ultimate Drive and XD Theater, said: “(I hope) they can renovate the place and make it more lively, like how Sentosa and Marina Bay Sands are doing, attracting the crowds, especially locals.”

Meanwhile, Zouk, which has to move out of its Jiak Kim Road premises by end-2017, is looking forward to meeting Straco to share its proposal, said the nightclub’s founder Lincoln Cheng.

Analysts said yesterday that Straco’s strengths were its track record in China and strong cash flow.

Barclays economist Leong Wai Ho said: “It does show promise as, ideally, it should be someone who understands the economics of tourism in Asia and its track record in China qualifies. Chinese tourists also form one of the core groups of tourist arrivals here.”

Ngee Ann Polytechnic senior tourism lecturer Dr Michael Chiam said: “If it wants to attract Chinese tourists, Straco would know the ins and outs.” The company has experience creating family-type attractions in China and it could recreate the concept here to draw the crowds, he added.

Mr Roger Tan, chief executive officer of Voyage Research, who warned that falling tourist arrivals would pose a challenge, said: “(The Flyer) still has value, but is not as valuable as it was thought to be. Straco could potentially have an idea of what to do to turn it around and the discount gives it an additional buffer to make any mistakes in its strategy.”

ADDITIONAL REPORTING BY TAN SHIWEI