SINGAPORE (THE BUSINESS TIMES) - CES Grosvenor (SA), a wholly-owned unit of Chip Eng Seng Corporation, has entered into an agreement to acquire a two-storey commercial building in Adelaide, Australia, for A$2.5 million (S$2.56 million).

Located at 80-82 Hindley Street, the property is situated on a freehold site and has a land size of about 287 square metres, Chip Eng Seng said in a Wednesday bourse filing. The deal is expected to be completed on July 1.

The property is fully tenanted. 80 Hindley Street is leased for use as a convenience store for a term of three years expiring in November 2023, with an option to renew for a further term of two years. Meanwhile, 82 Hindley Street is leased for use as a bar for a term of three years expiring in September 2023, with an option to renew for a further term of three years.

In explaining the rationale for the purchase, Chip Eng Seng noted that the property is adjoining other Hindley Street properties it had previously acquired. The company also previously acquired a hotel, now known as Grosvenor Hotel Adelaide, in the same zone.

"While the group considers its redevelopment plans for the area, the proposed acquisition in the meantime presents the opportunity for the group to have increased frontage along Hindley Street, which will allow it to better manage the tenant mix along that street," the company said.

Shares of Chip Eng Seng closed flat at S$0.455 on Wednesday.