Chip Eng Seng unit to sell 2 shophouses in Tanjong Pagar for $10.7m

The Tanjong Pagar properties and the Geylang Road property were acquired by Chip Eng Seng in 1988 and 1996 respectively.
The Tanjong Pagar properties and the Geylang Road property were acquired by Chip Eng Seng in 1988 and 1996 respectively.ST PHOTO: LIM YAOHUI

SINGAPORE (THE BUSINESS TIMES) - A subsidiary of property developer Chip Eng Seng Corporation is set to sell two conservation shophouses in Tanjong Pagar Road and three units of shophouses in Geylang Road, the company said in an exchange filing on Tuesday (April 6).

CES Capital Holdings entered into a sale and purchase agreement to sell its properties at 84/A/B and 86/A/B Tanjong Pagar Road, occupying an aggregate land area of about 1,653 sq ft, the company said. The purchase price is nearly $10.7 million.

It also granted an option to purchase for three adjoining units of 2½-storey shophouses with a four-storey rear extension at 115 Geylang Road, occupying about 3,290 sq ft, Chip Eng Seng said. The purchase price is $13.5 million, of which a potential buyer has paid a 1 per cent option fee.

The Tanjong Pagar properties and the Geylang Road property were acquired by Chip Eng Seng in 1988 and 1996 respectively, the company said, adding that they have been held as investment properties.

It said while these shophouse properties have been generating a stable stream of recurring rental income, they do not contribute significantly to the its revenue and profitability on the whole.

"The proposed disposals are thus in line with the group's asset management strategy to divest non-strategic or non-core assets or assets which do not contribute significantly to its revenue and profitability," Chip Eng Seng said.

This will allow the company to recycle the net proceeds for its working capital or to pursue opportunities which have "better upside potential" in terms of yield or capital appreciation, the company said.

It added that it is actively seeking offers for its remaining shophouse property in Singapore.

These proposed transactions are not expected to have significant impact on the net tangible assets and earnings per share of the company for the current financial year ending Dec 31.

Chip Eng Seng shares closed flat at 50 cents on Wednesday.