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Thakral Corporation has announced plans to acquire an 18,998 sq ft office unit at The Riverwalk in Singapore for $30 million from Thakral Realty (S) (TRSPL).
Subject to shareholders’ approval, the proposed transaction will be made through a put and call option agreement signed between Thakral and Thakral Investment Holdings.
The purchase price comprises a $9 million net sum for TRSPL’s entire shareholding and $21 million for its current outstanding loan.
With a 99-year lease tenure starting from December 1980, the office unit is located on the third level of the 27-storey commercial and residential development. It is fully tenanted and was recently valued at $30.5 million by JLL.
Situated along the Singapore River, The Riverwalk is located near the Central Business District.
Upon the completion of the proposed acquisition, Thakral will sign a three-year leaseback agreement with the tenants of the office unit at a monthly rental of $5.50 psf. The gross monthly rental works out to about $101,739.
In an SGX filing, Thakral revealed that it will fund the proposed acquisition via the proceeds received from the recent sale of its warehouse properties in Hong Kong.
“We believe that real estate in Southeast Asia – especially Singapore – is in a sweet spot. Given the uptrend in the local property market and Singapore’s improving economic outlook, demand for well-located commercial office space is expected to grow,” said Thakral CEO Inderbethal Singh Thakral.
“We are therefore entering the Singapore market at an opportune time as the value of such office buildings is forecast to appreciate in the coming years. The rental revenue from our investment in this Riverwalk office unit will also provide us a stable source of recurring income.”
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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