Developer Sim Lian Group, through its subsidiary Geo-Tele, has offered to sell its property at 9 Tai Seng Drive to Sabana Investment Partners (SIP) for S$46.3 million.
The construction and property company said the offer price represents a premium of 78 per cent over the book value and presents an attractive opportunity for it to dispose of the asset.
The firm will require the approval of JTC Corporation, which issued the property to Sim Lian, in order to sell the property.
The property will be purchased by SIP’s REIT manager, Sabana Real Estate Investment Management, which plans to list its units through a proposed initial public offering on the SGX.
Since this is an Islamic-based REIT, approval will also be needed from a Sharia’a Council to ensure future businesses on the property are Sharia-compliant.
Sim Lian subsidiary, Geo-Tele will also be required to provide rental income support of S$6.3 million for a period of 5 years from the date of completion.
Sim Lian said the group stands to gain S$13.3 million upon disposal of the property.
The proceeds from the sale will help the company deploy its financial resources more efficiently.
Source: Channel News Asia, 31 May 2010