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Far East Group granted an option on Friday (23 Mar) to Chang Hua Construction to purchase the former’s regional headquarters at 112 Lavender Street for $27 million.
According to an SGX filing released on the same day, the four-storey building is located on freehold land measuring about 1,936 sq m. It has a net book value of $4.2 million as of 31 December 2017, and a market value of $22.4 million as at 17 January 2018.
Far East Group said it is selling the property following its purchase of another building in 51 Ubi Avenue 3 last October for $22.5 million, which will be converted into its new regional headquarters.
“Further, the company is of the view that the proposed disposal will be in the best interest of the company as it will enable the group to realise the value of the property and provide liquidity and cash capital for the group, especially since the property is a non-core asset.”
Upon completion of the disposal, the net asset value of Far East Group is anticipated to more than double from $20.93 million to $43.02 million, while profits attributable to company owners will surge from $655,000 to $22.69 million.
Subject to shareholders’ approval, the transaction is expected to be completed no later than 29 June.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg
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