Metro acquires two office blocks via tie-up

Metro Holdings has entered a 50:50 joint venture to acquire 7 and 9 Tampines Grande, a premium Grade-A office property, the group said on Thursday night.

Metro’s 50 per cent capital commitment for the investment is about $45.6 million.

It said the investment was made in the ordinary course of its property investment and development business. Through the investment, Metro aims to gain exposure to Singapore’s Grade-A decentralised office market.

It said the move will grow its presence here, especially with the decentralised office strategy expected to dominate the market over the next decade.

The property will immediately contribute to Metro’s income stream, with potential positive rental reversion from upcoming lease renewals.

Metro said it has also received strata-subdivision approval from the authorities, “which will provide flexibility for it to be held as a whole for long-term investment or for sale as individual strata units”.

The investment is not expected to have any significant effect on the group’s consolidated net tangible asset per share and consolidated earnings per share for the current financial year ending March 31, 2020.


The property’s committed occupancy rate. Tenants include firms in the technology, financial services and insurance industries.

The joint venture was entered into by Metro’s wholly owned unit Metrobilt Construction and an affiliate of SRIF GP, an independent third party.

Through the newly incorporated firm Ascend TGrande, both parties have entered into a share-sale agreement with independent third party Golden Crest Holdings to purchase all the shares of T-Grande Investment Holding. T-Grande Investment Holding owns T-Grande Property Holding, which owns and operates the property.

Of the purchase consideration for 50 per cent of the issued shares, about $19.4 million comprises the consolidated net asset value of the target firm and the property firm.

The remaining $26.2 million is to acquire related shareholder loans.

The consideration will be subject to adjustments upon completion. It was arrived at on a willing-buyer, willing-seller basis, taking into account the expected net income to be derived from the property.

Metro’s commitment and expenses relating to the transaction will be funded with internal cash resources and external borrowings.

The total investment cost comprises the property’s acquisition price, stamp duty, financing costs, and other costs and expenses.

The joint-venture partners plan to fund the investment using a combination of shareholders’ equity, shareholders’ loans and bank borrowings.

Situated at Tampines Regional Centre, the property comprises two blocks of eight-storey office towers linked by an entrance lobby with retail, as well as food and beverage outlets on the ground floor.

It has a site area and gross floor area of approximately 86,110 sq ft and 361,660 sq ft respectively.

It has a total net lettable area of approximately 288,000 sq ft and has achieved a committed occupancy rate of about 91 per cent.

Tenants include conglomerates and firms in the technology, financial services and insurance industries, such as Hitachi Asia, Aldwych International, NCR Asia-Pacific, AIA Singapore and Sysmex Asia-Pacific.

Metro’s shares closed unchanged at $1.04 on Thursday before the announcement.

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