Lum Chang sells freehold London office building for £54.8m

MAINBOARD-LISTED builder Lum Chang Holdings' 70 per cent-owned subsidiary, UK Property Investment, has sold a freehold London office building for £54.8 million (S$98.7 million) in cash, the company said in a bourse filing on Wednesday.

The consideration was arrived at following arm's length negotiations, based on the adjusted unaudited net asset value of the unit trust which owns the property, 130 Wood Street Unit Trust, and takes into account the agreed value property of £55.2 million.

Lum Chang bought the unit trust for £51.3 million in May 2015.

The sale-and-purchase agreement for the trust was executed on March 10. The consideration is subject to post-completion review and adjustments, which are expected to conclude in the second quarter of 2020.

Lum Chang said it used the funds to repay an existing loan of £29.9 million secured against the property. 

The company is expected to recognise an estimated net gain after tax of about £500,000.

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The sale is in the ordinary course of Lum Chang's business, the company said. "It is an opportunity to realise the value of the assets held by the unit trust and unlock capital for reinvestment," it added.

Lum Chang shares were down 1.5 Singapore cents or 4.3 per cent to 33.5 cents as at 10.26am, after the announcement was made.