Hour Glass Acquire Units Tong Building 685 Mil
Luxury watch retailer The Hour Glass has exercised its options to purchase certain units within Tong Building from See Hoy Chan Realty and See Hoy Chan Land for a total of $68.5 million. The units in question are #09-01 to #09-04 and #10-01 to #10-04, as stated in a recent bourse filing on Sept 26. The deal was facilitated by Yap Hui Yee, executive director of investment sales and capital markets at Savills Singapore.
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According to Yap, the freehold status of the office floors adds great long-term value to the property, making it an attractive investment for those looking to preserve their wealth and capital. In fact, earlier this month, Yap also brokered the sale of the entire sixth floor of Tong Building to Parkway Hospitals Singapore for a record-breaking price of $31.33 million, or $4,562 per square foot (psf). This is the highest psf price ever recorded for an office space in the prime districts.
Each floor of the building has a strata area of 638 square meters (6,867 square feet) and boasts a prime location near The Hour Glass’ corporate offices within the building. The acquisition of these units is part of The Hour Glass’ strategy to invest in high-quality assets that complement their commercial properties in the region. The company has already paid a deposit of $3.4 million since signing the options to purchase, with the balance of the purchase consideration to be paid upon completion of the acquisition, expected in December 2024.
The acquisition will be funded by The Hour Glass’ strong internal resources, as the company is currently in a net cash position. As of March 31, 2024, the company had cash and cash equivalents amounting to $237.6 million. On a pro forma basis, if the property had been acquired as of March 31 this year, there would have been no changes to The Hour Glass’ net tangible assets (NTA) of $841.7 million, or NTA per share of $1.30. Additionally, if the acquisition had been completed on April 1, 2023, it would have resulted in a slight increase in the company’s earnings for FY2024, from $156.6 million to $157 million. The pro forma earnings per share would have also risen from 23.87 cents to 23.95 cents.
Shares of The Hour Glass closed slightly higher at $1.59 on Sept 26, an increase of 0.63%.
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