A consortium led by Singapore-listed construction and property development company Lian Beng Group, announced that it has entered into a put and call option agreement to purchase the BreadTalk HQ Building for $118 million.
Lian Beng holds a 75% stake in the consortium, with Apricot Capital, the investment arm of Super Group's Teo family, taking a 20% stake. Meanwhile, 32RE, the fund management business co-founded by Matthew Ong, CEO of SLB Development, holds a 5% stake.
The BreadTalk HQ Building is a 10-storey, single-user industrial development with retail component on the first level, located at 30 Tai Seng Street. The building has a gross floor area of about 248,902 sq ft, including the retail units.
The building has double frontage along Upper Paya Lebar Road and Macpherson Road, and is within walking distance from Tai Seng MRT station. The building was designed by award-winning local architect Tan Kay Ngee, and serves mainly as BreadTalk Group’s international headquarters, housing its flagship retail brands, corporate offices, warehouse spaces as well as test and central kitchens. There are other third-party tenants among the occupants in the building.
SEE: Hit by construction halt, Lian Beng Group earnings fall 12.8% y-o-y in FY2020
The property sits on a piece of land with a 30-year lease commencing from Feb 1, 2010, with an option to extend for a further 30 years.
BreadTalk Group has committed to lease back the property as an anchor tenant for an initial lease term of 10 years, with an option to either buy back the property at the end of the lease; or to extend the lease for a further five years at the prevailing market rent.
“We are pleased to kick off 2021 by adding an attractive property to our investment portfolio,” commented Ong Pang Aik, chairman and managing director of Lian Beng Group. “The acquisition will extend our investment footprint in industrial real estate and help to diversify our property portfolio.” He expects the property to yield positive rental returns, in addition to potential capital appreciation over the longer term.
Meanwhile, George Quek, BreakTalk Group’s chairman and group CEO, says the transaction is part of “our capital re-allocation strategy towards a more asset-light model as we continue to focus on our core F&B business”.
In late December, BreadTalk’s subsidiary, Imagine Properties, divested its shophouse at Lorong Mambong for $17.2 million to Cheong Sim Lam.
Shares in Lian Beng closed 0.5 cent lower or 1.1% down at 43.5 cents on Jan 15.
This story first appeared on Edgeprop Singapore.
