The news of Cuscaden Peak’s proposal to buy out the minority unit-holders of Paragon REIT at S$0.98 per unit created quite a buzz, leading to a sudden spike in the REIT’s market performance as of February 11, 2025. Paragon REIT witnessed an impressive 11.2% jump in a single day, making it the top performer among Singaporean REITs. However, not everyone was celebrating. Some unit-holders who had previously bought in at prices between S$1.00 and S$1.10 per unit were feeling the sting, as this offer came amidst a challenging high interest rate climate that had depressed unit prices since the post-COVID period.
In analyzing the situation, some have likened it to “Hungry Lions Butchered Retail Investors” owing to the fact that, while the latest offer of S$0.98 is significantly higher than the S$0.9372 per unit offered back in 2022, it still undervalues Paragon’s prime asset — the shopping mall. Originally a freehold property, it was restructured into a 99-year leasehold during its integration, a move that many see as financial engineering that detracts from its true worth. This has become a focal point of contention, as investors weigh the fairness and long-term implications of accepting such offers.
