UEM Sunrise Bhd is proposing to sell a property asset in Melbourne, Australia, to Acme Co No 4 Pte Ltd for A$107.09 million (RM304.13 million) in cash, to unlock real estate gains that can be channelled to its other investments.

In an exchange filing yesterday, the group said its wholly owned subsidiary, UEM Sunrise (St Kilda Road) Pte Ltd, acting as a trustee and on behalf of UEM Sunrise (St Kilda Road) Unit Trust, has entered into a contract of sale with Acme, the purchaser for the divestment.

The property in question is a site and building located at 412 St Kilda Road, Melbourne, with a net lettable area of approximately 16,258 sq m, as well as 174 car park bays plus all improvements and fixtures.

“The proposed divestment allows UEM Sunrise to immediately unlock the value of the pro- perty at a gain in line with market value and free up the cash to enable the group to pursue other investments and venture opportunities,” UEM Sunrise stated.

The proposed divestment will not have any effect on the group’s issued and paid-up share capital, nor on its substantial shareholders’ stakes in the group.

It is expected to contribute positively to the earnings, earnings per share and net tangible asset per share of the group.

According to the property developer, Acme is a trustee for Recap V Management No 5 Trust, under the care of SC Capital Partners Pte Ltd, Singapore.

Acme is also a wholly owned subsidiary of One Investment Group Pte Ltd, Australia. Its board of directors include Michael John Sutherland, Frank John Tearle and Sarah Wiesner, who are all based in Sydney, Australia.

The price consideration was on a willing buyer willing seller basis, taking into account the market valuation of the surrounding area and the facilities available within the vicinity.

“The property is located at a strategic corner site of St Kilda Road and Bowens Crescent, one of the main arteries into the Melbourne Central Business District and flanked by a mix of office, residential and mixed-use towers.

“The site currently accommodates a 21-storey building with panoramic views overlooking the Royal Botanic Gardens to the north, Fawkner Park to the north-east and Albert Park, as well as Port Philip Bay to the south and southwestern aspects,” UEM Sunrise said.

The property was acquired by the company in May 2016 for A$58 million.

The group expects to recognise revenue of A$107.09 million and net disposal gain of A$19.12 million from the divestment, which is not anticipated to have a material effect on the group’s gearing.

“The proceeds from the proposed divestment will be utilised for working capital, investments and other venture opportunities,” it said.

The proposal is expected to be completed by the end of the year.

Shares of UEM Sunrise closed unchanged yesterday, valuing the company at RM3.4 billion.

News Source: Malaysian Reserve, 13th November 2019.