REAL Real Estate Investment Company MYP, owned by Indonesia’s billionaire Tahir family, reported plans to sell ABI Plaza at Tanjong Pagar for $200 million.
Artemis Ventures is a Singapore-based investment holding firm related to a private fund operated by CapitaLand Wealth Management.
MYP’s wholly-owned company, Grace Shine, signed the Conditional Selling and Purchase Contract (SPA) with Artemis on 24 September.
The 12-story freehold office tower at 11 Keppel Road has a gross net area of about 92,498 square feet, four car parks and an average floor area of about 12,500 square feet per floor.
The building was completed in 1994 and is to be used for central business district reward scheme by the City Planning Authority.
As of the SPA date, it will be sold on a ‘as is, where it is’ basis and before and with the value of tenancies, rentals, permits and/or occupation agreements that apply at the contract end, MYP said.
Grace Shine purchased the house for S$175 m in 2011, before Grace Shine acquired MYP in 2013 and 2015 for two tranches. Back then, the gross land buying expense was S$165,8 million.
The new selling price is approximately 20.6% higher than the selling rate, but 23.1% lower than the asset market valuation of S$ 260.1 million as of March 31.
This is ABI Plaza ‘s latest independent assessment sponsored by MYP as part of the group’s annual review of its investment funds. Teho Property Analysts performed the evaluation using asset valuation and income capitalization method.
Monday, the MYP reported that evaluation of the planned disposition took into account, among other considerations, the land’s market valuation, the current economic circumstances impacting the property market, and the MYP’s offerings.
ABI Plaza was launched in June at a $280 million guide tag. The Business Times (BT) announced that only a few parties had made submissions on July 30 at the end of the interest exercise, all below S$200 million.
Later, CapitaLand-controlled private fund emerged as the sector leader at around S$206 million and entered exclusive due diligence, BT said.
MYP said the planned sale reflects the group’s attempts to sustain a stable balance sheet and ample flexibility for long-term , sustainable growth to fulfill potential investment needs.
Sales would also enable the firm to leverage property’s underlying value and redeploy sales to possibly higher-yielding acquisitions to maximize shareholder returns, MYP observed. This is despite the turmoil of the world economy and housing market coronavirus pandemic.
The net income is estimated to be S$197.5 million, used by MYP to repay the bank loan and its general working capital.
The proposed disposal is subject either to the consent of the MYP owners at the Extraordinary General Meeting (EGM) to be held or to the waiver of obligation by the Singapore Exchange. Every must be obtained within 16 weeks of SPA date.
If successful, disposal is required within four weeks of the SPA date , four weeks after the waiver date, or two weeks after the EGM date.
ABI Plaza ‘s net tangible asset valuation is around S$260.1 million each, said MYP. For FY2020, the estate’s pre-tax net loss amounted to roughly S$429,000.
The planned sales would result in some S$ 60.1 million in “book” disposition loss, while the real “cash” benefit from the transaction would be S$ 34.2 million based on historical sales expense, MYP noted.