The Business Times | 05 April 2013
Metro Holdings has entered into an option to sell its warehouse at 100H Pasir Panjang Road to OC Land for $39.8 million.
The deal was brokered by DTZ. Its research arm had pegged the freehold property's latest open market value at about $40 million, in a valuation report dated Jan 15.
Currently, a single-storey warehouse and a three-storey office annexe sit atop the 31,978 square feet plot that is opposite to the Pasir Panjang Wharves.
It has been zoned for Business 1 use under Master Plan 2008 and has a plot ratio of 2.5.
This works out to a price of $498 per sq ft per plot ratio. No development charge needs be paid for the site.
The buyer, an acquisition vehicle incorporated by wine importer and supplier Wine Culture for the purchase, will make the full payment in cash and is purchasing the land for its own use.
The consideration represents 5.2 per cent of the property and retail group's market capitalisation of $759.6 million based on the volume weighted average price of its shares transacted on Wednesday, rendering it a disclosable transaction under Singapore Exchange's listing rules.
Metro said that proceeds from the divestment will be added to its working capital.
It explained that it considers this to be "an appropriate time" for the disposal of the property as the warehouse is under-utilised at the moment.
Upon completion of the transaction in three months, the group will receive a net gain of $29.6 million from the disposal, after taking the property's book value of $9.9 million and expenses into account.
Illustrating the financial effects using audited results for the financial year ended March 31, 2012, Metro said that net tangible assets per share post-transaction is $1.381, up from $1.346, while earnings per share will rise from 11.3 cents to 14.9 cents.
The counter closed half a cent lower at 91 cents yesterday.
Martin Koh | 86666 944 | R020968Z
Sherry Tang | 9844 4400 | R020241C
Senior Sales Director
DTZ Property Network Pte Ltd (L3007960A)