Top Global a Mainboard listed group recently announced their plans to buy 43 units of Thong Teck Building and 23 freehold lots for an amount of S$170m.
There are 39 office spaces and 4 retail spaces which were sold that are all situated within the nine storey Thong Teck Building which is located on 15 Scotts Road. This area was built in the 1970s and was upgraded in 2014.
There were reports in May when speculations were rife that Top Global was interested in buying office and retail spaces.
The company had then commented that there were still assessing the market but did confirm that there were talks of buying strata units.
It was also reported that Executive Director of Allied Technologies, Kenneth Low Si Ren took control since April from Albert Hong, the founder of RSO Architects Planners and Engineers’.
Recently Top Global announced that Top Automation, its wholly owned subsidiary would be exercising its right of purchase by the end of August.
Top Automation and Scotts Icon signed a purchase agreement through an acquisition of shares that are spread over 6 targeted companies. No details have been given on the shareholding of Scotts Icon.
It was earlier reported that Mr Low of Allied Tech owned 100% of Platform Capital Asia (Singapore) that owns the Thong Teck properties which have gone under sale.
Reports suggest that Top Global is paying in cash the total amount of S$170 million which they will generate through internal resources and bank finances.
To prevent any roadblock in the future, it has been reported that the buyers have already initiated an additional advance amount of S$1.9 m. This amount was directly sent to the seller’s bank so that the sellers can get the bank loan through mortgage of the properties.
As of 31 July, the property collectively represents 54% of MCST (management corporation strata title) share value.
The property’s gross lettable area measures about 57000 sq ft.
According to the valuation reports prepared by Savills Valuation and Professional Services, the market value of these properties is around S$180m. Top Global had commissioned the evaluation.
As of 31st December 2018, the aggregate book value of the properties was S$122m while the aggregate net tangible asset was S$121.4 million.
According to Top Global since the properties were valued for S$10 m over purchase price and there was a notable difference of S$600,000 between the book and tangible values, the company saw this as a rare opportunity to buy strata units of a commercial property that is located in a prime location such as Orchard Road at such an attractive price.
The group spokesperson added that while currently the properties are yielding low rentals, especially in comparison to what other neighbouring properties have been yielding, there is a lot of potential to increase the yield in the upcoming years.