Tat Hong to milk up to $25.5m from Singapore properties divestment
To offset impact of lower crane rental rates.
According to Maybank Kim Eng, Tat Hong will be divesting 11 Gul Crescent as part of its optimisation programme to mitigate the impact on lower crane rental utilisation rates.
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The site at 11 Gul Crescent was acquired in 1981 on a 30+30 year lease and comprises 29,384sqm of land with a 1.4x plot ratio. Tat Hong will move its operations to Tuas South Street, where it has secured a 22-year lease from JTC for a 16,100sqm plot.
Sale of Gul Crescent would realize SGD20-25m net gain. Using recent JTC sales of B2 industrial land as a gauge, we estimate that Tat Hong could sell the site for SGD39-44m, based on SGD90-100psf, which implies a potential net gain of SGD20.2-25.5m.
According to management, Tat Hong still has five other sites in Singapore with remaining leases of between 2 and 11 years, a couple more of which will likely be divested this year.