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.
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The news is out: City Harvest will be moving to its new premises at Suntec Singapore International Exhibition and Convention Centre by 2011.
This has probably been City Harvest Church’s best-kept secret in its 21-year-history. The exact location of the church’s new site has been a hot topic that has kept Christians within and outside the church guessing, since it was confirmed on Jan. 16 that a space had finally been procured after a five-year search.
Bound by a non-disclosure agreement, the management could not say a word until yesterday afternoon, at the first service of the weekend at the Jurong West church.
The revelation of Suntec Singapore International Exhibition and Convention Centre met with great excitement from the church congregation. This location would put all the services of the church under one roof.
“When we were looking for a property, there were three major considerations,” said senior pastor Kong Hee.
1. Size. “It had to be as big as we can go in our small city-state with limited land. Suntec Convention Centre has a total usable area of more than 1 million sq ft—that is 20 times our Jurong West property and 10 times Expo Hall 8. Suntec has the size we need and can accommodate our traffic.”
2. Location. “We wanted a place that was central and easy to get to by MRT and bus. CHC members come from all over the island. Suntec is centrally located with three major MRT stations nearby: City Hall MRT is a 10-minute walk; Esplanade MRT and Promenade MRT open this April and are even closer by.”
3. Facilities. “A church is not just a main sanctuary and nothing else. Having extra facilities is critical to the operations of the church. We need areas for children, rooms for Bible study, car park space and eating places. Suntec Convention Centre has more than 30 meeting rooms, and we will have access to over 8,680 car park lots in the Suntec-Marina area. Between Suntec City and the Convention Centre, there are 283 stalls/restaurants for our members to eat at, and 622 retail stores for our members to shop in.”
Through this agreement, CHC becomes a co-owner of Suntec Singapore International Convention and Exhibition Centre, and has a share in the annual revenues of all its facilities. The two floors CHC will primarily use are the sixth and seventh floors and include the CHC Auditorium which is column-free and can accommodate up to 12,000 seats. Early plans for this space reveal a stadium-style layout with a sizeable play area for children, and 10 meeting rooms. “All our morning prayer meetings, seminars and conferences will be held here in the future,” explained Kong.
The other parts of the Convention Centre will be open to the public, and will continue to be rented by third parties for exhibitions, fairs and performances as is currently the case.
Tan Ye Peng, deputy senior pastor, explains to City News what co-ownership of Suntec Singapore means. “Last year, ARA Asset Management Limited announced that its ARA Harmony Fund had acquired the Suntec Singapore International Convention and Exhibition Centre. Harmony Fund’s investors comprise Suntec REIT, which holds 20 percent, and a consortium that holds 80 percent. CHC has bought a significant stake into the consortium.”
City Harvest is looking to raise S$310 million, but this sum is not the value of the property, says Tan. “This amount consists of cost of shares; rental; renovation and equipment; professional building, management logistic and maintenance fees; refundable deposits and moving costs.”
One of the key considerations for this site is the business model that CHC can and will adopt for Suntec Singapore. “For Singapore Expo, we are in a lease-only business model. As such, what is being paid out does not have any returns or profit-sharing for CHC. The Board and the Building Committee discussed and concluded that with an ‘ownership-and-lease’ business model, the rent we pay out will be recovered by CHC in the form of profits and dividends.”
“It’s perfect for our church,” says Tan. “This place has everything we need. It’s been around, it’s an established place. It has been the venue for some of the most important events that ever took place in Singapore, like the APEC CEO Summit last November, and the International Monetary Fund-World Bank meeting in 2006. This August it will be the venue for the 2010 Youth Olympic Games. It’s got all the facilities, and it’s super convenient. There is no other place that allows us this space size in this part of Singapore.”
In the event that there are such key events on the same scale as the IMF-World Bank meetings, Tan says City Harvest will exercise flexibility and vacate the space for such clients. “We are now part-owners,” he explains. “It benefits us too.” Tan points out that although City Harvest will use the space for its services, the building is still a commercial entity, and technically not a “church building”. “The church will lease the space to use for our services,” explains Tan. “The difference is that we are also co-owners of this building.”
For Chew Eng Han, who was tasked in 2005 to be the key person on the ground to find out what was available, and to speak to consultants and banks, the success of this partnership with Suntec Singapore is a triumph. “I feel fulfilled,” he declares.
The search was far from an easy one. “It required a lot of wisdom,” says Chew. “We needed the right location, central yet big enough, yet it could not be too costly, and it had to earn income, too. At the time we were looking, between 2005 and 2008, construction costs were escalating. When the crash came, property prices came down, but finding a partner became a challenge.”
Suntec Singapore was negotiated at the right time, and agreed upon at the right price, says Chew.
“It’s the best location because it’s already in existence. Although it may have been around for a number of years, the building is continually being refurbished and in good shape. Since we are not buying a new plot of land, we don’t have the risk of escalating costs—building costs fluctuate. The space is great: it totals over 1 million square feet, the hall is big enough, there are more than 30 meeting rooms and we have access to the Gallery space, and also the 600-seat Theatre on weekends.”
“It’s an ideal location for City Harvest, really—but at a much lower price than its original cost.” Suntec Singapore was originally built for a price of S$650 million in the early 1990s.
The best news for the burgeoning congregation may be the fact that with the space already built and available, CHC targets to move in by the end of the first quarter of 2011 once its lease at the Singapore Expo expires.
For some, the announcement brought tears of joy. For others, the location was a complete surprise. (See box story: What The Members Say)
Kong’s wife, singer Sun Ho, flew back to celebrate the announcement together with the church. Moments after the announcement, she tells City News: “I’m standing in a historical moment when miracles have just happened. God has done it again. My heart is overwhelmed, because this is something in which not just Kong and I, but the whole church have sown, labored, prayed, believed and claimed for, for so long. This is the time, this is the moment—we sowed in tears, and now we are really reaping in joy. Above the location, my heart is just so full of gratitude that we are able to build this house for God, for His glory. I’m grateful I can be a part of it.”
The church will fund the S$310 million through freewill donations from churchgoers. The church building fund, Arise & Build, is into its fifth round, with a target of S$17.3 million. There are eight more Arise & Build campaigns planned.
Further information on the design and details of the Suntec Singapore location will be released in the coming weeks.
(Asiaone and Citynews)
