Far East Orchard unit acquires additional stake in Woodlands Square for S$25 million – The Business Times

A UNIT of Far East Orchard (FEO) has acquired an additional stake in its commercial property in Woodlands for S$25 million.

Woods Square, an integrated commercial development comprising offices and retail spaces, was completed in 2020 and was a joint venture between FEO’s wholly owned subsidiary Tannery, Far East Civil Engineering (FECE), and Sekisui House.

Each joint venture partner held a one-third interest in the share capital of Woodlands Square, the company set up to own and undertake the development of Woods Square.

In a bourse filing on Friday (Jan 24), FEO said Tannery and FECE agreed to purchase all of Sekisui House’s interest in Woodlands Square.

Tannery acquired 6.7 per cent of the company’s stake for S$25 million.

Meanwhile, FECE acquired the remaining 26.7 per cent stake. FECE is wholly owned by the estate of Ng Teng Fong, a controlling shareholder of FEO.

This resulted in Tannery and FECE now owning 40 per cent and 60 per cent of the company, respectively.

FEO said the consideration paid by Tannery is lower than 6.7 per cent of the net asset value of Woodlands Square. “This strategic opportunity allows the company to utilise its excess cash to generate higher returns to deliver long-term value to shareholders,” it added.

It also said the office and retail units at Woods Square are “close to 100 per cent leased, while the office units held for sale continue to achieve stable selling prices”.

FEO expects the acquisition to further contribute to its income stream.

The pro forma net tangible asset per share of FEO for its financial year ended Dec 31, 2023 – assuming the acquisition took place on Dec 31, 2023 – would be unchanged at S$2.59.

Meanwhile, pro forma earnings per share – assuming the acquisition took place on Jan 1, 2023, and excluding the one-off gain – would rise to S$0.139, from S$0.137.

Shares of FEO closed flat at S$1.02 on Friday, before the announcement.