Top Global to buy 43 units in Thong Teck Building for S$170m from Allied Tech director

Property group Top Global has decided to buy 23 freehold commercial strata-titled lots with 43 property addresses in Thong Teck Building for S$170 million.

The properties comprise 39 office units and four retail units located within the nine-level Thong Teck Building on 15 Scotts Road, which was built in the mid-1970s and upgraded in 2014.

The Business Times (BT) had reported in May that Top Global would be buying a parcel of office and retail space from entities that Kenneth Low Si Ren, executive director of Allied Technologies, is believed to have taken control of in April from RSP Architects Planners and Engineers’ founder Albert Hong.

Following the BT 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 on Monday morning that its wholly owned subsidiary, Top Automation, had on Aug 30 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. BT previously reported that Allied Tech’s 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 S$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 S$1.9 million that was 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 square feet, and collectively represent some 54 per cent of the management corporation strata title (MCST) share value as at July 31.

The total market value of the properties is S$180 million as at July 31, based on the valuation report by Savills Valuation and Professional Services (S) that was commissioned by the buyer. The properties’ aggregate book value and the aggregate net tangible assets of the target companies was S$122 million and S$121.4 million respectively, as at Dec 31, 2018.

As the properties are valued at S$10 million above the purchase price, and the difference of their book value and the net tangible assets of the target companies is S$600,000, the acquisition 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.

Furthermore, the current rental yield of the properties is low, compared to the rental yield of other properties within the vicinity, which means there is potential for Top Global to increase rental yield, the group added.

Shares of Top Global were trading flat at 19.2 Singapore cents as at 9.33am on Monday.

In May, some S$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 help with investigations.

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