MYP to sell ABI Plaza for S$200m to CapitaLand fund entity

REAL estate investment firm MYP, which is controlled by Indonesian billionaire Tahir's family, on Monday announced it plans to sell ABI Plaza in Tanjong Pagar for S$200 million.

The buyer, Artemis Ventures, is a Singapore-incorporated investment holding company and linked to a private fund managed by CapitaLand Fund Management.

Mainboard-listed MYP's wholly-owned subsidiary Grace Shine on Sept 24 entered into a conditional sale and purchase agreement (SPA) with Artemis.

Located at 11 Keppel Road, the 12-storey freehold office tower has a total net lettable area of about 92,498 square feet (sq ft), four car-park levels and an average floor plate of around 12,500 sq ft per floor.

The building was completed in 1994 and stands to benefit from the Urban Redevelopment Authority's central business district incentive scheme.

It will be sold on an "as is, where is" basis as at the date of the SPA, and subject to and with the benefit of tenancies, leases, licences and/or occupation agreements that are subsisting at the deal's completion, MYP said.

Grace Shine had bought the building for S$175 million in 2011, before MYP acquired Grace Shine in two tranches in 2013 and 2015. Back then, the total cost of acquisition attributable to the property was S$165.8 million.

The latest deal price is about 20.6 per cent higher than that cost of acquisition, but 23.1 per cent lower than the property's market value as at March 31 of S$260.1 million.

That's the latest independent valuation of ABI Plaza commissioned by MYP as part of the group's yearly valuation of its portfolio of investment properties. Teho Property Consultants carried out the valuation using the market comparison and capitalisation of income methods.

MYP on Monday said the proposed disposal's consideration took into account, among other things, the property's market value, prevailing economic conditions affecting the property market and the offers which MYP received.

ABI Plaza was put on the market in June at a guide price of above S$280 million. The Business Times (BT) reported that when the expression of interest exercise closed on July 30, only a few parties were said to have made submissions, all below S$200 million.

The private fund managed by CapitaLand later emerged as the frontrunner for the property at about S$206 million, and entered into exclusive due diligence, BT reported.

MYP said the proposed disposal is in line with the group's efforts to maintain a strong balance sheet with sufficient resources for future investment needs for long-term and sustainable growth.

The sale will also enable the group to unlock the property's underlying value and redeploy the proceeds to potentially higher-yielding assets to optimise returns to shareholders, MYP noted. This comes amid uncertainty in the global economy and property market as a result of the coronavirus pandemic.

Net proceeds are estimated to be S$197.5 million, which MYP will use to repay a bank loan and for its general working capital.

The proposed disposal is subject to either approval from MYP shareholders at an extraordinary general meeting (EGM) to be convened, or a waiver from the Singapore Exchange from the requirement to do so. Either of these must be obtained within 16 weeks from the date of the SPA.

If successful, the disposal is expected to complete on the later of four weeks from the SPA date, four weeks from the date of the waiver, or two weeks from the EGM date.

The net tangible asset value of ABI Plaza and its book value are each about S$260.1 million, MYP said. Pre-tax net loss attributable to the property for FY2020 was about S$429,000.

The proposed disposal will amount to a "book" loss on disposal of some S$60.1 million, although the actual "cash" profit arising from the deal will be S$34.2 million based on the historical cost of acquisition, MYP noted.

MYP on Sept 24 called for a trading halt, and lifted it during the midday break on Monday. Its shares last traded at S$0.11 on Sept 17.

Shares of CapitaLand were trading flat at S$2.69 as at 2.06pm on Monday.


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