Mainboard-listed property group Top Global is buying 23 freehold commercial strata-titled lots with 43 property addresses in Thong Teck Building for $170 million.
The properties comprise 39 office units and four retail units within the nine-level Thong Teck Building at 15 Scotts Road, which was built in the mid-1970s and upgraded in 2014.
The Business Times reported in May that Top Global would be buying a parcel of office and retail space from entities that Allied Technologies executive director Kenneth Low Si Ren is believed to have taken control of in April from RSP Architects Planners & Engineers founder Albert Hong.
After that report, Top Global said in late May that it had been granted options to purchase the strata units, but was "still evaluating the market conditions" in relation to the options.
The group announced yesterday that its wholly owned subsidiary, Top Automation, last Friday exercised its rights in share purchase agreements with Scotts Icon for the purchase of the properties, via the acquisition of all the shares in six target companies.
It did not provide details on Scotts Icon's shareholding.
It was previously reported that Mr Low owns 100 per cent of Platform Capital Asia (Singapore), which owns the transacted Thong Teck properties indirectly through various units.
Top Global will pay the total purchase price of $170 million in cash, funded through bank financing and internal cash resources.
However, in order for the properties to be free of encumbrances, the buyer has advanced an additional sum of about $1.9 million, paid directly to the seller's bank to redeem the full bank loan secured by way of mortgage over the properties.
The properties have a net lettable area of about 57,000 sq ft, and collectively represent 54 per cent of the management corporation strata title share value as of July 31.
The total market value of the properties is $180 million as of July 31, based on a valuation report by Savills Valuation and Professional Services that was commissioned by the buyer.
The properties' aggregate book value and the aggregate net tangible assets of the target companies were $122 million and $121.4 million respectively, as of Dec 31 last year.
The properties are valued at $10 million above the purchase price, and the difference of their book value and the net tangible assets of the target companies is $600,000.
The acquisition therefore represents a "rare opportunity to acquire a substantial number of strata units within a building in the prime Orchard Road area at attractive prices", the group said.
It added that the current rental yield of the properties is low, compared with the rental yield of other properties within the vicinity, which means there is potential for it to increase rental yield.
Top Global shares were flat at 19.2 cents yesterday.
In May, some $33 million of Allied Tech's funds placed in escrow with law firm JLC Advisors were reported to have gone missing.
The Commercial Affairs Department later called in Mr Low on May 28 to assist with investigations.