LISTED retail and property group Second Chance Properties (SCP) said yesterday that it will buy 22 retail units at Sim Lim Square for $35 million.
The units - all on the fifth floor - have a combined floor area of 9,604 sq ft. 'They are fully tenanted to 27 retailers and the gross rent per annum is $2.634 million with a return of 7.3 per cent,' SCP said.
The units were valued by Jones Lang LaSalle, and with interest rates so low, they will be 'profitable immediately (yield accretive)', it said.
The purchase takes SCP's portfolio to 76 retail units with a combined floor area of 49,532 sq ft of space, valued at a total of $145 million. Once the latest deal is completed, SCP's rental income will be $10.2 million per year.
The purchase will funded by bank borrowings. It was approved by SCP's board on Oct 21 and is subject to shareholder approval at an extraordinary general meeting in December.
In August, SCP reported a 56.7 per cent drop in net profit to $10.4 million for the year ended June 30, largely due to a fourth-quarter shift in fair value charges for its properties - from a $13.8 million gain in Q4 2008 to a $1.3 million deficit in Q4 2009.
Its shares ended half a cent weaker at 33.5 cents yesterday.
Source: Business Times, 23 Oct 2009