RAFFLES United Holdings has entered into an agreement to pay S$7.98 million for a 51 per cent stake in Raffles Capital Enterprise, which owns seven two-storey shophouses along Lavender Street. The units have a freehold tenure and a total land area of 1,217.7 square metres.
Raffles United's directors said that the proposed acquisition is in line with the group's strategy to expand into property investment, and is a good opportunity given the scarcity of freehold commercial properties in Singapore as well as the shophouses' proximity to the city and transport links.
The purchase price was arrived at based on arm's length negotiations and accounting for market conditions and the market value of the properties based on the average of independent valuation reports. Valuers engaged by the company valued the shophouses at S$30 million.
The proposed acquisition is also an interested persons transaction, as Raffles Capital Enterprise is owned by Teo Teck Yao Glenn Ashley and Teo Xian-Hui Amanada Marie, who are the children of Raffles United's managing director Teo Teng Beng and together hold a 66 per cent stake in Raffles United.
The board will call for an extraordinary general meeting to seek shareholders' approval for the proposed acquisition.