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Suntec REIT divested its 30% stake in the property formerly known as Park Mall to Haiyi Holdings at an agreed property value of $295.5 million.
Suntec REIT has divested its 30% stake in 9 Penang Road, formerly known as Park Mall, to Haiyi Holdings at an agreed property value of $295.5 million or $2,468 per sq ft (psf) based on the net lettable area (NLA).
In an SGX filing on Wednesday (16 Jun), the REIT noted that the agreed property value translates to a 5.7% premium over the $931.8 million latest valuation of the property. It is also 30.3% higher than the property’s $756 million total development cost.
It added that the net property income yield stands at 3.3% on a stabilised basis.
“We are pleased to have realised a gain on divestment of S$66.5 million and achieved a 305% return on our investment,” said Chong Kee Hiong, CEO of the REIT’s manager.
“The divestment proceeds will improve our financial flexibility to pursue growth opportunities to further enhance the resilience, diversification and value of Suntec REIT’s portfolio for unitholders. Post divestment, Suntec REIT continues to be anchored by the resilient office segment which will contribute more than 80% to the REIT’s total income contribution with Singapore properties constituting about 75% of our total assets under management.”
The former Park Mall site was redeveloped into a Grade A commercial building by a joint-venture between Haiyi Holdings, SingHaiyi Group and Suntec REIT.
9 Penang Road was completed in 2019, featuring two office towers as well as ancillary retail with an NLA of about 399,000 sq ft. As of 31 March 2021, the ten-storey development has a committed occupancy of 98.7%, with the two office towers wholly leased to the global financial institution UBS AG.
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Cheryl Chiew, Digital Content Specialist at PropertyGuru, edited this story. To contact her about this story, email: cheryl@propertyguru.com.sg
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