SINGAPORE - Singapore-listed marketing firm, Communication Design International (CDI), will venture into the property development business as part of a new diversification plan to enhance earnings.
CDI has agreed to acquire two holding companies that own three prime properties in Tokyo, Japan, it said in a statement to the SGX Thursday.
On Oct 21, CDI entered into a conditional sales and purchase agreement with Mr Low Soon Sim to acquire the entire issued and paid-up share capital of Richwood Asia I Investments Limited and One Room Mansion Limited (ORM) for $31 million.
The propsed acquisition is for Green Forest Kuramae, a freehold 78-unit residential development, Green Forest Itabashi, a leasehold 75-unit mixed use development comprising 75 residential units and a supermarket, and Hatchobori Place, a six-storey commercial office development with a supermarket.
All three properties are substantially or fully tenanted out, and cater mainly to local residents and businesses, CDI said.
The proposed acquisition, if approved by shareholders, will be funded by proceeds from past placement exercises completed in July 2013 and June 2014, and the proposed placement of 245 million new shares at 12 cents per share announced on Sept 18.
"The proposed acquisition will generate a stable income stream for the group, given the stable outlook for the Japanese property market," said Mr Zheng Jiabin, the CDI's president and chief executive.
"By targeting local residents and companies, we expect leasing demand to be more stable. In addition, these properties have good potential for asset enhancement or re-development in the longer term given their convenient locations."