SINGAPORE – Tuan Sing is buying Westgate Tower in Jurong East for $600 million, adding to its portfolio of income-generating properties in Singapore as it seeks to strengthen its recurring rental income.
The property group said on Oct 23 that its wholly owned subsidiary, Greenlane Land, signed a sale and purchase agreement to acquire all the shares in Westgate Commercial and Westgate Tower.
The two entities collectively own all the commercial office units at the property, located at 1 Gateway Drive.
The agreed property value of $600 million is 6.25% below an Oct 1 valuation of $640 million, and some 12% below the $680 million that investment manager AEW paid when it acquired Westgate Tower from Sun Venture in 2022.
At $600 million, the office building is transacting at roughly $1,967 per sq ft of net lettable area totalling about 305,000 sq ft. JLL brokered the deal.
The 20-storey Grade A office asset houses 295 strata-titled office units. Its committed occupancy rate is about 90 per cent, and the building stands on a site with some 87 years’ balance lease.
The strata-titled structure gives Tuan Sing flexibility to sell individual units or retain the building as a whole for rental income, said the group.
Asked if it planned to sell the units individually or redevelop the tower for a specific use, CEO William Liem told The Business Times: “We have not made a decision but we remain flexible. Our priority is to improve occupancy further.”
He added: “The acquisition reflects our disciplined approach to capital allocation – investing selectively in quality assets where we see clear potential to enhance returns and create sustainable long-term value for our shareholders.”
Tuan Sing’s existing Singapore investment properties consist of prime office, retail and hospitality assets, including 18 Robinson and Dunearn Village.
The purchase consideration will be paid entirely in cash, using a combination of internal resources and bank financing. The transaction is expected to be completed on Dec 1.
Following the acquisition, Tuan Sing’s net gearing is expected to increase from 1.01 times to 1.4 times.
The group said that the property’s recurring income and the option to sell individual strata units would give it flexibility in the long-term management and positioning of the asset.
The Singapore Exchange (SGX) Regulation has granted Tuan Sing waivers from certain SGX listing rules, which means the acquisition does not require classification as a “very substantial acquisition” or shareholder approval before completion.
The group said it nonetheless intends to seek shareholders’ ratification after the acquisition is completed.
Its shareholders Nuri Holdings and Greenpark Investments, which collectively hold 60.4% of its issued shares, have undertaken to vote in favour of the acquisition, if required.
AEW has also put its stake in 30 Raffles Place up for sale.
The company owns the upper part of the Central Business District building comprising 27 office floors. The Olayan Group, which has its origins in Saudi Arabia, owns the three lowest office floors (levels three to five) and the retail podium (from basement two to level two).
The two owners are said to be looking at a total guide price of at least $1.1 billion for 30 Raffles Place.
Shares of Tuan Sing last traded at 27.5 cents, down one cent, at 12.15pm on Oct 23, before it requested a trading halt. THE BUSINESS TIMES
Source : https://www.straitstimes.com/business/tuan-sing-to-buy-westgate-tower-in-jurong-for-600m
