Cuscaden Peak Investments—backed by Singapore state-linked investor Temasek Holdings—is seeking to take Paragon REIT private in a deal valuing the shopping mall operator at S$2.8 billion ($2.1 billion).

Under the deal, Times Properties, a wholly-owned subsidiary of Cuscaden, is offering to buy the rest of Singapore-listed Paragon REIT it doesn’t own at S$0.98 apiece, about 10% premium from Monday’s closing price.

The deal provides investors an exit from the risk and volatility that may arise with the proposed upgrading of the REIT’s flagship Paragon shopping mall on Orchard Road, which would entail as much as S$600 million of investments.

“Given the increasingly competitive retail landscape, we believe that a major asset enhancement initiative for Paragon is necessary to maintain its competitiveness as a leading upscale retail mall in Singapore,” Gerald Yong, CEO of Cuscaden said, in a statement.

With the backing of tycoon Ong Beng Seng’s Hotel Properties and Temasek’s CLA Real Estate Holdings and Mapletree Fortress, Cuscaden had in 2022 bought Singapore Press Holdings’s REIT (which has since been renamed Paragon REIT) for S$3.9 billion, trumping the rival bid made by oil-rig builder and property developer Keppel Corp.

Last month, Paragon said in a regulatory filing that Hotel Properties’ Tiga Stars is no longer a shareholder of Cuscaden. Financial details were not disclosed. The move will allow Hotel Properties “to focus its resources on the development of its other assets and projects,” according to the filing.

Hotel Properties’ biggest projects is the proposed redevelopment of three adjoining prime properties on Orchard Road, which analysts estimate would cost as much as S$2 billion. It has already secured approval to build a hotel, retail, office and residential complex on the combined 14,027 square-meter site occupied by Voco Hotel, Forum Shopping Center and HPL House.

The Hotel Properties project is among the upcoming redevelopments considered by Cuscaden as a challenge to Paragon’s premier status in the Orchard Road shopping precinct.

The privatization of Paragon REIT will facilitate a “major asset enhancement initiative to future-proof Paragon,” which accounts for 72% of the REIT’s appraised value and which is facing rising competition from nearby shopping centers, Paragon REIT said. The upgrade could take “several years” and the privatization will spare investors from execution risks, it added.

Paragon mall opened in 1986 and the last time it was upgraded was in 2009 when rival Ion mall opened. Neighboring Ngee Ann City and Wisma Atria shopping complexes had been revamped in 2023. The Shoppes at Marina Bay Sands is undergoing an S$8 billion makeover.