Hwa Hong acquires two commercial plots for $13.8m

Hwa Hong Corporation has acquired two commercial freehold plots in Jalan Besar from City Developments Limited for $13.8 million in total.

The option to purchase was exercised by Hwa Hong's indirect wholly owned subsidiary Global Trade Investment Management (GTI) yesterday.

The two sites have a combined land area of about 300.1 sq m (3,230 sq ft) and are zoned commercial with a gross plot ratio of 3.0.

They are located close to City Square Mall and Little India, and within walking distance of Farrer Park and Jalan Besar MRT stations. The Central Business District is also a short drive away.

JLL on April 23 launched an expression of interest exercise by inviting submissions for the purchase of the sites. Interested parties were invited to submit their expressions of interest to JLL in sealed envelopes on a confidential basis by the closing date of May 30.

Multiple expressions of interest were received by JLL. GTI was selected under the expression of interest exercise and granted the option to purchase on June 12.

The group said it plans to develop the sites into one or two commercial buildings with a maximum total gross floor area of about 900.3 sq m (9,691 sq ft).

"The acquisition will allow the group to invest in the subject sites and thereby expand its commercial property portfolio in Singapore," Hwa Hong added.

"The acquisition is also in line with the group's strategy to seek development opportunities in Singapore to strengthen its recurrent future rental income and for capital appreciation."

In arriving at the purchase price, Hwa Hong said it factored in asking prices and current transacted prices, as well as asking rents and current rents, of commercial shophouses in the immediate area and other comparable areas.

It also considered the total estimated development costs of projects of similar size in similar locations, and the indicative price of $13.5 million for the sites.

No shareholders' approval is required for the acquisition. The deal is not expected to have any material impact on the net tangible assets and earnings per share of the group for the financial year ending Dec 31, 2018.

Separately, mainboard-listed MYP has, through wholly owned subsidiary Affreton, agreed to sell its freehold MYP Plaza to Golden Estate Properties for $247 million.

The buyer is affiliated to Filipino billionaire Lucio Tan's group of companies, a conglomerate based in the Philippines, based on an earlier filing on April 27.

The property at 135 Cecil Street is a 14-storey freehold office tower in the Central Business District, and has a net lettable area of around 82,334.28 sq ft with three basement carpark levels.

A version of this article appeared in the print edition of The Straits Times on June 27, 2018, with the headline 'Hwa Hong acquires two commercial plots for $13.8m'. Print Edition | Subscribe