Luxury watch retailer, The Hour Glass, has made a strategic move to acquire units in Tong Building from See Hoy Chan Realty and See Hoy Chan Land for $68.5 million. The company exercised its options to purchase the units, which include #09-01 to #09-04 and #10-01 to #10-04, according to a filing on Sept 26.
The deal was brokered by executive director of investment sales and capital markets at Savills Singapore, Yap Hui Yee. Yap believes that the freehold status of the office floors adds long-term value, making it an attractive choice for those looking to preserve their wealth and capital.
In a separate deal earlier this month, Yap also facilitated 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 for an office space in the prime districts to date, solidifying Orchard Road’s position as a medical hub.
Each level of the Tong Building units comprises a strata area of 638 square meters (6,867 square feet) and is part of a premium-grade office property with a freehold status. These units are positioned close to The Hour Glass’ corporate offices within the building.
According to The Hour Glass, the acquisition is in line with its strategy to invest in high-quality assets that will complement its existing commercial properties in the region. The company has paid a deposit of $3.4 million upon signing the options to purchase and is expected to pay the remaining balance upon completion of the purchase in December 2024.
The acquisition will be funded using the company’s internal resources, as The Hour Glass is currently in a net cash position with $237.6 million in cash and cash equivalents as of March 31, 2024. On a pro forma basis, if the property had been acquired on March 31, there would be no changes to the company’s net tangible assets (NTA) of $841.7 million or NTA per share of $1.30.
In addition, if the acquisition had been completed on April 1, 2023, the company’s FY2024 earnings would have increased to $157 million from the original $156.6 million. Pro forma earnings per share (EPS) would have also risen to 23.95 cents from 23.87 cents.
Shares in The Hour Glass closed at $1.59 on Sept 26, up 1 cent or 0.63%.