The Hour Glass, a luxury watch retailer, has exercised its options to purchase units in Tong Building for a total of $68.5 million. The purchase includes units #09-01 to #09-04 and #10-01 to #10-04, as announced in a filing to the Singapore Exchange on Sept 26. The deal was brokered by Yap Hui Yee, executive director of investment sales and capital markets at Savills Singapore. Yap believes that the freehold status of the office floors adds significant long-term value, making it an attractive investment for those looking to safeguard their wealth and capital. In a separate transaction earlier this month, Yap was also responsible for the sale of the entire sixth floor of Tong Building to Parkway Hospitals Singapore for a record-breaking price of $31.33 million, or $4,562 per square foot. This transaction has solidified Orchard Road’s position as a premier medical hub, according to Savills.Each level of the property covers an area of 638 square meters and is situated within the freehold premium-grade office building. These units are located near The Hour Glass’ corporate offices within the building and align with the company’s strategy to invest in high-quality assets that complement their commercial properties in the region. The options to purchase have been signed, and the group has already paid a deposit of $3.4 million. The remaining balance is expected to be paid upon completion of the purchase in December 2024. The Hour Glass plans to use its internal resources to fund the acquisition, as the company is currently in a net cash position with $237.6 million in cash and cash equivalents as of March 31, 2024.In terms of financial impact, if the acquisition had occurred on March 31, there would have been no change to The Hour Glass’ net tangible assets of $841.7 million or NTA per share of $1.30. However, if the transaction had been completed on April 1, 2023, the company’s earnings for fiscal year 2024 would have increased to $157 million from $156.6 million, and its pro forma earnings per share (EPS) would have risen to 23.95 cents from 23.87 cents. On Sept 26, shares in The Hour Glass closed 1 cent higher at $1.59.
.
The demand for Singapore Condos remains high due to a variety of factors, one of which is the limited availability of land. As a small island nation with a rapidly growing population, Singapore is facing a scarcity of land for development. In response, the government has implemented strict land use policies, resulting in a competitive real estate market where property prices continue to rise. As a result, investing in real estate, especially Singapore Condos, has become a profitable venture with the potential for future capital appreciation.