Ho Bee to yield S$31mln for sale of investment properties

The property group sells its TG Building in Tagore Lane and divests part of its commercial portfolio at Samsung Hub.

Ho Bee Investment Ltd on Thursday has announced that its wholly-owned subsidiary, Ho Bee Developments Pte Ltd has entered into contracts for the sale of two investment properties to two unrelated parties, according to a Ho Bee release.

The release said the first investment is the sale of TG Building, a 4-storey warehouse development located in Tagore Lane. The property was developed in 2002 and is sold for S$33 million to a private company, M/s Advance Facilities Pte. Ltd.

This reflects a sale price of $254 per square foot over the gross floor area of about 130,000 square feet. A 5% deposit has been paid to the Group and the completion of the sale is scheduled for 13 October 2010, Ho Bee said.

For the second sale, Ho Bee said it has divested part of its commercial portfolio at Samsung Hub, a four office floors (levels 8,9,10 and 11) with a total floor area of 52,431 square feet are sold for S$111,415,875 or S$2,125 per square foot.

The sale is scheduled for completion on 8 November 2010 with Sun Venture Invesco Pte. Ltd, which has already paid 5% deposit, as buyer. Ho Bee said after the sale, it still retains the higher floors of levels 12, 13, 14 and the prime ground floor retail space totaling about 44,600 square feet.

The property group said the two sales will yield a gain of approximately S$31 million, with sale proceeds intended to be used for the reduction of the group’s borrowings and provide additional working capital for the Group’s businesses.

“I believe our recent acquisition of a prime commercial site at One-North for future recurring income and the current divestments of these investment properties to improve cashflow and to rationalize our investment holdings will be well received by the market. According to property consultants, the office market has bottomed out and going forward, the rental market for the office sector should present more upside. This strategy will hopefully provide another successful Ho Bee story after Sentosa,” said Mr. Chua Thian Poh, Chairman and Chief Executive Officer.

Mr Chua refers to the group’s recent bidding for a commercial land at One North which is expected to yield a gross floor area of about 1.2 million square feet of office space. In a statement last month, Ho Bee has expressed intentions to lease out the new office development for recurring income when completed in four to five years time.