SINGAPORE (Dec 11): The Straits Trading Company, through its subsidiary, Straits Real Estate (SRE), is selling four residential properties, located in Central Osaka, Japan, for a total consideration of JPY 8.25 billion ($103.2 million), the company reported on Wednesday.
The sale will see the group book a gain of JPY 890 million ($11.1 million).
The properties, namely Luxe Taisho, Luxe Shin Osaka, Luxe Dome Mae and Splendid Namba II, are freehold residential rental properties comprising a total of 516 units.
Luxe Taisho, Luxe Shin Osaka and Luxe Dome Mae were acquired in 2Q16 while Splendid Namba II was acquired in 1Q17. The total cost of the acquisitions amounted to some JPY 7.36 billion ($92.1 million).
Straits Trading says that the consideration was arrived at on a willing-buyer and willing-seller basis, after taking into account the valuations of the properties. The consideration will be satisfied on a cash basis.
Based on independent valuations, the aggregate value of the properties was noted to be JPY 7.82 billion ($97.8 million) as at end June.
CEO of SRE Desmond Tang says that the gains realised from this divestment would allow the company to seek out new real estate investment opportunities, either in Japan or other markets.
"Globally, major markets are presenting attractive investment opportunities due to stressed economic or capital conditions. SRE is actively considering some of these markets for investment," adds Tang.
Upon completion of the divestment, SRE’s residential portfolio in Japan will comprise 600 apartment units across eight freehold properties in Tokyo.
SRE noted that it will continue to consider investment opportunities in Tokyo and other Japanese cities, and remains bullish on Japan's real estate outlook and generally resilient economy.
Straits Trading noted that the proposed sale is not expected to have a material impact on the group’s earnings per share, net tangible asset per share or issued share capital for the current financial year.
Shares in Straits Trading closed four cents higher, or up 1.9%, at $2.10 on Wednesday prior to the announcement.
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