A CONSORTIUM led by mainboard-listed Lian Beng Group is set to buy the BreadTalk IHQ Building in Tai Seng in an S$118 million sale-and-leaseback deal.
BreadTalk Group, which was privatised by its founders last year, will rent the property as an anchor tenant for an initial 10 years.
It can then either extend its lease by another five years at market rate or buy back the building at a mutually agreed price.
Lian Beng, which holds a 75 per cent stake in the consortium, plans to fund its share of the purchase through bank borrowings and/or internal resources.
Meanwhile, another 5 per cent of the joint venture is held by 32RE Investments, tied to an associate of Lian Beng spin-off SLB Development.
The third partner, with a 20 per cent interest, is Apricot Capital, a private investment firm by the Super Group’s Teos.
Lian Beng’s board called the deal in line with its core property investment business, while chairman and managing director Ong Pang Aik said it “should enable us to yield positive rental returns from this investment in addition to potential capital appreciation”.
Mr Ong added: “The acquisition will extend our investment footprint in industrial real estate and help to diversify our property portfolio.”
The 10-storey BreadTalk IHQ Building – which mainly houses BreadTalk’s international headquarters, eateries, warehouses and kitchens – has a gross floor area of 248,902 sq ft. The land tenure runs out in 2040, but can be extended for 30 years.
The transaction, which requires approval from government landlord JTC, is slated to go through on April 1 or eight weeks from the put-and-call option being exercised, whichever is later, or at any other date that the parties agree on.
Lian Beng independent director Tan Khee Giap is also a BreadTalk director, the board said. Otherwise, no other directors or controlling shareholders have interests in the deal.
The group last posted net profit of S$17.6 million for its first half-year to Nov 30, 2020, down 5.2 per cent year on year, while revenue fell by 36.6 per cent to S$197.5 million.
Lian Beng shares closed at S$0.435 on Friday, down by half a Singapore cent or 1.14 per cent, before the latest announcement.
By Annabeth Leow, The Business Times/ 16-Jan-21