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Far East Orchard unit disposes of Bassein Road properties stake for S$38.1m
FAR East Orchard's wholly owned subsidiary, OPH Marymount (OPHM), on Thursday entered into a sale and purchase agreement with Transurban Properties (TPPL) to dispose of its interest in two properties on Bassein Road for a consideration of S$38.1 million, at its net book value sum.
This constitutes an interested person transaction. The properties are "Lot 621K of Town Subdivision 29" and "Lot 45L of Town Subdivision 29".
On Sept 8, 2010, both OPHM and TPPL were jointly awarded the tender for both properties, which were zoned for residential purposes. They entered into a joint venture to acquire and develop the land parcel. OPHM acquired 30 per cent of the land parcel while TPPL acquired the remainder.
But OPHM had to obtain a qualifying certificate from the Singapore Land Authority for the acquisition. The qualifying certificate required OPHM to complete the construction of the residential development at the land parcels and obtain temporary occupation permit by March 24, 2016.
In April 2011, OPHM and TPPL completed the purchase of the land parcels, but a slew of property cooling measures introduced by the government since December 2011 resulted in changes in market circumstances, which included a significant and progressive slowdown in the residential property market.
Due to such changes, it was decided that OPHM should not proceed to partake in the proposed residential development on the land parcels, and the disposal will free up resources for the group to focus on other aspects of their business.
On Thursday, Far East Orchard's counter closed down 0.295 per cent at S$1.69.