Stamford Land to sell Perth commercial development for A$67.8m

STAMFORD Land Corporation will be divesting Stamford Green, a Grade A commercial development in Perth for A$67.8 million (S$68.3 million).

Formerly known as Dynons Plaza, the property comprises a 14-storey office building and three adjacent heritage premises.

It has been vacant since Chevron's lease expired in April 2020, said Stamford Land on Wednesday.

This was due to poor leasing conditions and high vacancy in the Perth central business district, further compounded by the Covid-19 pandemic in the beginning of the year, the luxury property developer added.

The trustee of Dynons Perth (2010) Trust, a wholly-owned subsidiary of Stamford Land, has signed the contract for the deal with buyer Redhill Partners Investment.

The contract is subject to the buyer obtaining approval from the foreign investment review board, among other things.

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Stamford Land does not have to obtain prior shareholders' approval for the deal, as the Singapore Exchange has granted it a waiver from this requirement, subject to several conditions.

One reason its board of directors sought the waiver was that some shareholders including Stamford Land executive chairman Ow Chio Kiat, who hold a combined 50.1 per cent stake, will vote in favour of the divestment if a general meeting was required to approve the deal.

Stamford Land will have to submit an undertaking that Mr Ow and these other shareholders intend to vote in favour, and that they will not dispose of their shares till then.

Furthermore, the proposed divestment is time-sensitive and needs to be expedited so as to allow the company to avoid incurring significant costs and expenses, the board added.

It also believes the sale of the property, a non-core asset of Stamford Land, will not cause a change in the risk profile of the company, and is in the commercial interest of the company.

The group plans to reinvest the net sale proceeds into any future opportunities.

No valuation was carried out in connection with the divestment due to the time-sensitive nature of the transaction, Stamford Land said.

However, the sale price and the property's rental income - for the period from the development completion date till its divestment - is already more than 90 per cent over the inital investment outlay by the group, Stamford Land noted.

Stamford Green is located at 905-919 Hay Street, at the western end of Perth's central business district, in the state of Western Australia.

Shares of mainboard-listed Stamford Land rose 1.6 per cent or 0.5 Singapore cent to trade at 32 cents as at 10.33am on Wednesday.