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UOI to buy 146 Robinson Rd from UOB for S$52m
UNITED Overseas Insurance (UOI) plans to buy the office property located at 146 Robinson Road, also known as Overseas Union Trust Building, from United Overseas Bank (UOB) for S$52 million, it said on Wednesday.
The property will be UOI's first real estate investment and it intends to move its own operations into the premises.
UOI, the Singapore-listed general insurance arm of UOB, said in a bourse filing: "The property has street-level frontage and visibility in a busy area of the financial district. The directors are of the view that upon acquisition and relocation to the property, UOI will receive an immediate boost to its corporate image and branding."
UOI intends to hold the property as a long-term investment to enhance its fixed asset base, it added.
"The property would provide a hedge against rental increases in the property market. Rental income from leasing out excess space would diversify UOI's income stream and lessen profit volatility," the company explained.
The 12-storey building, including the basement level, has a gross floor area of approximately 4,631.49 square metres and a leasehold tenure of 99 years from June 3, 1992.
According to an independent valuation by Colliers International as at June 10, the value of the property is S$52 million.
This sum will be paid by UOI in cash from internal sources, it said. A S$2.6 million deposit has already been paid to UOB.
UOB is deemed to have an interest in 58.39 per cent of UOI, so the sale constitutes an interested-party transaction.
The price tag of S$52 million represents around 13.74 per cent of the latest audited net tangible assets of UOI as at end-2018, so the proposed acquisition will require the approval of UOI shareholders at an extraordinary general meeting.
The transaction is expected to be completed by Feb 28, 2020.