Thakral Corporation has realised a net gain of about $2.5 million compared to the original acquisition cost from the divestment of the Riverpoint Kitahama Building in Osaka, Japan. The sale price was also $84,000 more as compared to the carrying value as of 31 December, 2020.
The Riverpoint Kitahama Building is a 3,415 square metre office building near the Osaka Securities Exchange in Osaka’s financial district.
Following the completion of the divestment on Aug 30, Thakral’s real estate investment portfolio in Japan will have a total of six commercial buildings, with a combined area of around 430,000 square feet and 3 business hotels with a total of 336 rooms.
See also: Thakral reports surge in earnings to $8.95 million in 1H21; declares interim dividend of 2 cents
Thakral acquired the Riverpoint Kitahama Building in the fourth quarter of 2018, carried out renovations and increased the occupancy rate to about 90%.
The investment was made through TJP, which it has a 53.06% interest and was carried in the books at fair value.
The uplifts in valuation have been recognised by Thakral on an annual basis since acquisition, and the net gain after the last valuation uplift shall be recorded as share of profit from the Japanese TMK associate.
The company said the proceeds from the sale will be used to reduce debt, go towards future investments and partially for dividend payment.
Thakral’s Group CEO and executive director Inderbethal Singh Thakral said in a release, “The divestment of Riverpoint Kitahama Building at a cap rate of approximately 4.4% is in line with the Group’s strategy to maximise returns by unlocking value of our investment properties in Japan at the opportune time. With the sale, we are able to lock-in the profit from our capital assets and recycle the funds for future investments.”
Shares of Tharkal closed flat at 54 cents on Aug 30.
