Suntec REIT has sold its 30% interest in 9 Penang Road, UBS Singapore business hub, to Haiyi Holdings Pte. Ltd. for S$295.5 million or S$2,468 per square foot.
Suntec REIT said the agreed property value represents a 5.7% premium over the latest valuation of S$931.8 million and 30.3% higher than the total development cost of S$756.0 million. On a stabilised basis, the net property income yield is 3.3%.
“The divestment of 9 Penang Road is part of our proactive portfolio management strategy to enhance unitholders’ value. We are pleased to have realised a gain on divestment of S$66.5 million and achieved a 305% return on our investment. The divestment proceeds will improve our financial flexibility to pursue growth opportunities to further enhance the resilience, diversification and value of Suntec REIT’s portfolio for unitholders. Post divestment, Suntec REIT continues to be anchored by the resilient office segment which will contribute more than 80% to the REIT’s total income contribution with Singapore properties constituting about 75% of our total assets under management,” said Chong Kee Hiong, Chief Executive Officer of the Manager.
The Manager had unlocked the potential of the former Park Mall site and maximised the asset value by redeveloping the former property into a Grade A commercial building through a joint venture with Haiyi Holdings Pte. Ltd., SingHaiyi Group Ltd and Suntec REIT.
Completed in 2019, the ten-storey development consists of two office towers and ancillary retail with a NLA of approximately 399,000 sq ft. The committed occupancy was 98.7% as at 31 March 2021 with the two office towers fully leased to a global financial institution, UBS AG.
