Chip Eng Seng has entered a deal to sell the property at 69 Ubi Crescent in Singapore to Merlions Two (BVI) for around S$28 million, the Singapore-listed property company said in a filing to SGX Friday.
“While the property has been generating a stable stream of recurring rental income, it does not contribute significantly to the group’s revenue and profitability on the whole,” Chip Eng Seng said in the statement.
“The proposed transaction will allow the group to recycle the capital arising from the net proceeds of the sale for its working capital purposes and/or to pursue opportunities which have better upside potential in terms of yield and/or capital appreciation,” the company added.
Under the deal, Chip Eng Seng’s wholly owned subsidiary, CES Capital Holdings (CESCH) will sell all of its shares in Evervit Development Pte. Ltd. (EDPL), which holds the property, the filing said.
The net asset value of EDPL is around S$12.97 million based on the latest unaudited management accounts of EDPL, the filing said, adding the purchase price is above the last valuation of the property conducted at end-2020.
The property, which has around 35 years left on its leasehold tenure, is a six-storey light industrial building with a basement carpark; Chip Eng Seng built the property, which was completed in 2000, and has held it as an investment property since, the filing said. The property is around 96 percent tenanted, the filing said.
The deal is expected to be completed by 11 March 2022, the filing said.