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The properties have a net lettable area of around 57,000 sq ft and collectively represents about 54 percent of the Management Corporation Strata Title (MCST) share value as at 31 July 2019.
Top Global Limited has decided to acquire 23 freehold commercial strata-titled lots with 43 property addresses in Thong Teck Building for $170 million.
This comes after its fully-owned subsidiary, Top Automation, exercised its rights in share purchase agreements with Scotts Icon for the acquisition of the properties through the acquisition of all shares in six target companies.
In an SGX filing, the mainboard-listed developer revealed that the properties comprise four retail and 39 office units situated within Thong Teck Building at 15 Scotts Road.
About 350 m from Orchard MRT Station, Thong Teck Building is situated at the fringe of Orchard Road shopping, hotel and entertainment belt. It was built in the mid-1970s and upgraded in 2014.
The properties have a net lettable area of around 57,000 sq ft and collectively represents about 54 percent of the Management Corporation Strata Title (MCST) share value as at 31 July 2019.
The total purchase price of $170 million will be paid in cash by Top Global, which is funded via a combination of bank financing and internal resources.
“However, in order for the properties of the target companies transferred to be free of encumbrances, the purchaser advanced the vendor an additional sum of $1.871 million that was paid directly to the vendor’s bank to redeem the full bank loan secured by way of mortgage over the properties.”
As at 31 July 2019, the properties have a total market value of $180 million based on the valuation report by Savills Valuation And Professional Services (S), which was commissioned by the purchaser.
The properties’ aggregate book value and the target companies’ aggregate net tangible assets as at 31 December 2018 stood at $122 million and $121.4 million respectively.
“Based on the valuation report, the properties are valued at $10 million in excess of the total consideration. The difference of the aggregate book value of the properties and aggregate net tangible assets of the target companies as at 31 December 2018 is $0.6 million. This represents an opportunity for the group to acquire valuable assets at attractive prices,” said Top Global.
“Furthermore, the current rental yield of the properties is low as compared to the rental yield of other properties within the vicinity of the properties. As such, there is a potential for the group to increase rental yield.”
Victor Kang, Digital Content Specialist at PropertyGuru, edited this story. To contact him about this or other stories, email victorkang@propertyguru.com.sg
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