Raffles Education buys Merchant Sq for $65m
RAFFLES Education Corporation has purchased a commercial property known as Merchant Square for $65 million.
The property – located at the centre of Merchant Road, Fisher Street and Angus Street – comprises a four-storey office tower and two blocks of shophouses.
It has a 99-year leasehold from 1993 and a total net lettable area of 50,262 square feet.
The education provider said: ‘The directors believe that the proposed acquisition will enable the company to secure a permanent place of business instead of using rented premises and having to re-locate when the lease is up.’
Raffles Education, which yesterday exercised the purchase option, said the acquisition will be funded by internal cashflows and bank borrowings.
The acquisition value was arrived at ‘after considering factors such as the current use of the property and the general property market conditions in Singapore’. No independent third party valuation was conducted, said Raffles Education.
Illustrating the financial effects of the transaction, Raffles Education said that based on the tenancy and services agreements provided by the vendor – Merchant Square Pte Ltd – and taking into account only direct expenses, ‘the net profit attributable to Merchant Square for the financial year ended June 30, 2010 is approximately $1,835,000’.
Date: 14 January 2011 | For the full report, please visit http://www.businesstimes.com.sg