Chip Eng Seng unit to sell Australia property for A$65 million

PROPERTY company Chip Eng Seng's wholly-owned subsidiary, CES Gladstone (Vic), is selling a property in Australia for A$65 million (S$65.6 million) to a trust related to American real estate developer Greystar.

The deal is expected to be completed on March 31 next year. The buyer will first pay a deposit of A$3.25 million, equivalent to 5 per cent of the sale price, and the remaining sum upon completion.

Chip Eng Seng said on Friday that the proposed sale will allow the group to redeploy its capital to opportunities that can generate better returns based on current and anticipated market conditions, "taking into account the impact of the Covid-19 pandemic on the real estate sector in Melbourne".

That said, the Australia market remains an "integral part" of the group's long-term growth and diversification strategies, Chip Eng Seng added.

The property to be sold was acquired by CES Gladstone in 2016. Spanning 5,900 square metres, it was to have been developed into three towers comprising over 700 residential units. But currently, above-ground construction works have not yet begun, and the property will be sold with vacant possession.

Shares of Chip Eng Seng closed unchanged at S$0.44 on Friday before the announcement.