First Sponsor sells Amsterdam office building to associate for 55.3m euros

Fiona Lam

Published Thu, Nov 28, 2019 · 12:23 AM

PROPERTY developer First Sponsor has sold the entire share capital in a wholly-owned subsidiary, which has a perpetual leasehold interest in a land parcel in the Netherlands, to a 33 per cent-owned associate firm, FSMC NL Property Group.

As a result, the subsidiary, FS NL Zuidoost Property 15 BV (NLP15), has become an indirect 33 per cent-owned associate company of First Sponsor, the mainboard-listed group said in a filing on Thursday.

NLP15's land parcel is located in Amsterdam with a site area of about 7,910 square metres (sq m). An office building named "Oliphant" with a total lettable floor area of 21,136 sq m sits on the site.

First Sponsor said the sale will generate development profit while retaining a meaningful stake for future capital appreciation and recurrent income.

The estimated consideration, payable by the buyer FSMC, is 55.3 million euros (S$83.4 million). This was calculated based on pre-completion estimates of the levels of cash, working capital and debt of NLP15.

The agreed commercial value of the property is 108.1 million euros, which is equal to JLL's valuation of 112.8 million euros minus the agreed value of all unpaid current and future rent incentives granted by NLP15 to the tenants at the Oliphant building.

The agreed commercial value and the consideration were arrived at after arm's length negotiations, taking into account JLL's valuation and the current property market conditions in the Netherlands, First Sponsor said.

The office redevelopment of the Oliphant building was completed in February 2019. Additional development works for a new parking garage are expected to start in early 2020 and completed around the end of the third quarter next year.

Earlier this week, First Sponsor also announced that it has partnered Australia's ICD Property to build a mixed-use skyscraper in Sydney. First Sponsor will also be the sole construction financier for the Sydney redevelopment project.

Shares of First Sponsor closed flat at S$1.30 on Wednesday.