Tuesday, October 10, 2006
[RealEdge] BT : UOL exits Central Plaza for $175m
| Published October 10, 2006  | |||
| UOL exits Central Plaza for $175m Group will pocket gains of $79m from the sale
By LESLIE YEE
AGAINST the backdrop of a buoyant office property market in Singapore, UOL Group yesterday announced that a wholly owned subsidiary is selling Central Plaza at 298 Tiong Bahru Road for $175 million.
UOL said the sale will result in a gain of about $79 million or 9.96 cents per share for the group. It said completion of the transaction is scheduled for January 2007 and the gain will thus be reflected in the results for the financial year ending Dec 31, 2007. The subsidiary, UOL Tiong Bahru Plaza Pte Ltd, yesterday inked a conditional sale and purchase agreement with Bakersfield Pte Ltd, a unit of Asian Retail Mall, to sell all its interest in Central Plaza, which comprises a 20-storey office block with a net lettable area of 190,792 square feet. In early 2002, Asian Retail Mall bought the adjacent Tiong Bahru Plaza, which is a retail mall, from UOL for $195 million. Market watchers say there is asset enhancement potential from converting the common areas between the Tiong Bahru Plaza and Central Plaza to shops or kiosks or using the common areas in other ways to generate revenue. UOL had built both the the mall and the office tower above Tiong Bahru MRT Station as a single development. Asian Retail Mall is a property fund managed by Pramercia Real Estate Investors (Asia), formerly known as GRA Singapore. UOL said the sale will enable the group to 'reduce its borrowings and position itself to take advantage of investment opportunities as and when they arise'. For illustrative purposes, if the transaction had been effected at the end of 2005, UOL's net tangible assets per share as at Dec 31, 2005, would have increased from $2.96 to $3.01. UOL said the consideration for the sale was arrived at based on negotiations on a willing-buyer, willing-seller basis, and it believes the gain from the sale will likely not be subject to tax as the said property has been held as a long-term investment. Last week, UOL's listed subsidiary Hotel Plaza announced the sale of the company which owns Parkroyal on Coleman Street, a 10-storey hotel building with 330 rooms and an adjacent shopping arcade, for a total net cash consideration, excluding shareholder' UOL's share price closed at $3.70 yesterday, which is up 47 per cent in the year to date. The group's market capitalisation is around $2.9 billion. | |||
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