Suntec REIT has divested its 30% interest in a property located at 9 Penang Road to Haiyi Holdings for $295.5 million.
This translates to a price of $2,468 per square foot based on the property’s net lettable area.
The property is the former site of Park Mall, which was redeveloped into a commercial building through a joint venture between Suntec REIT, Haiyi Holdings and SingHaiyi Group. The building is currently tenanted by UBS Singapore.
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On a 100% basis, the agreed property value of $985 million represents a 5.7% premium over the latest valuation of $931.8 million as well as a 30.3% premium over the total development cost of $756 million for the entire property.
On a stabilised basis, the net property income yield is 3.3%.
“The divestment of 9 Penang Road is part of our proactive portfolio management strategy to enhance unitholders’ value. We are pleased to have realised a gain on divestment of $66.5 million and achieved a 305% return on our investment,” says Chong Kee Hiong, CEO of the manager.
“Post divestment, Suntec REIT continues to be anchored by the resilient office segment which will contribute more than 80% to the REIT’s total income contribution with Singapore properties constituting about 75% of our total assets under management,” he adds.
Units in Suntec REIT closed 3 cents or 1.99% lower at $1.48 on June 16.
Photo: UBS
