The sale consideration amounts to S$1,812 per square foot (psf) based on the building’s net lettable area of 154,528 square feet. It is a leasehold property whose lease expires on 20 February 2105 and is in close proximity to several subway stations in the city-state.
The transaction saw Lian Beng purchase the property from a trustee of CCT, HSBC Institutional Trust Services (Singapore) Limited, with the sale expected to be completed in September 2017.
Located at the junction of Wilkie Road and Selegie Road, Wilkie Edge is a 12-storey integrated development comprising office and retail units as well as a serviced residence, Citadines Mount Sophia, which is leased to Ascott Residence Trust for 96 years from 17 November 2008.
The purchaser shall take over all existing rights and obligations in relation to this existing lease. As at 31 March 2017, Wilkie Edge contributed 3 per cent to CCT’s Q1 2017 net property income, with the top three tenants being SF Consulting Pte Ltd, Kaplan Learning Institute Pte Ltd and Tower Research Capital (Singapore) Pte Ltd.
The sale consideration is 39.3 per cent above the 31 December 2016 valuation of S$201.0 million or S$1,301 psf and 53.3 per cent higher than its original purchase price of S$182.7 million in 2008.
CCT is expected to recognise an estimated net gain of approximately S$76.0 million over the 31 December 2016 valuation. Based on Wilkie Edge’s net property income of S$9.5 million for the 12 months preceding 31 March 2017 and the sale consideration, this translates to a net property yield of 3.39 per cent per annum.
Lynette Leong, CEO of CCTML said, “The sale of Wilkie Edge is in line with the Trust’s portfolio reconstitution strategy to rejuvenate its portfolio and recycle capital to give us the financial flexibility to invest in more attractive growth opportunities. Assuming all the net proceeds from the sale is used to repay existing debt, CCT’s aggregate leverage as at 31 March 2017 would decrease from 38.1% to 35.7%.”
“Together with our recent sale of 50% of One George Street, the sale proceeds will give us comfortable headroom to invest in opportunities that will continue to generate sustainable returns for our unitholders.”