Tat Hong Holdings has sold its property at 18 Sungei Kadut Avenue to Top Zone Construction and Engineering for S$7 million in cash.
Tat Hong said that the sale is part of its plans to improve operating efficiency by consolidating operations in the Tuas area and moving some of its less time-sensitive operations to Johor, Malaysia.
"It is uneconomical to invest in the redevelopment of 18 Sungei Kadut Avenue given its small plot size and short remaining lease," the company added. The property has a plot size of 3,606 square metres (sqm) and a total built-up area of 5330 sqm, and its lease expires on Nov 1, 2022.
Tat Hong said that the sale price was arrived at on a willing-buyer, willing-seller basis, and took into account recent property transactions, the current lacklustre property market and a S$7.2 million valuation dated June 6, 2014.
The property has a net book value of S$2.8 million as at Feb 28, 2015, and the group will realise a net gain of S$4.1 million after deducting expenses.
Tat Hong's share price closed 2.5 cents lower at 66.5 Singapore cents on Tuesday, before this sale was announced.