SingPost to sell 14 HDB shophouses to Trans-Cab unit for $55.5 million

SINGAPORE - Singapore Post (SingPost) on Nov 11 announced that it will divest 14 HDB shophouses across the island for a cash consideration of $55.5 million.

The sale-and-purchase agreement also has a leaseback option, each lasting about three years.

The purchaser is Trans Realty, a subsidiary of taxi operator Trans-Cab Holdings. The consideration was arrived at an arm’s-length negotiation on a willing-buyer, willing-seller basis, taking into account the independent open-market valuations by real estate consultancy Knight Frank and prevailing market conditions.

The properties, originally acquired between 1989 and 1996 for SingPost’s operations, have an aggregate book value of $6.4 million as at Sept 30.

SingPost’s estimated gain from the disposal of these Housing Board properties is $49.1 million.

Trans Realty has paid 5 per cent, or $2.8 million, of the aggregate consideration as a deposit; the balance is due upon completion.

SingPost said it is disposing of the properties because they are considered “non-core” to its principal business. The group is reviewing its asset portfolio under a drive to redeploy capital towards its core business.

The proceeds from the proposed disposal are intended for the group’s working capital and general corporate purposes.

SingPost said: “The board will consider the most appropriate use of funds, including debt reduction, reinvestment into the business, and potential shareholder returns, taking into account its funding requirements.”

Had the proposed disposal been completed on April 1, 2024, earnings per share would have gone up from 10.9 cents to 13.1 cents. Net profit would have also risen from $245.1 million to $294.2 million, on a pro forma basis.

Shares of SingPost rose 1.2 per cent or 0.5 cent to 42.5 cents as at 9.19am on Nov 12, after the announcement.

THE BUSINESS TIMES