FJ Benjamin sells Orange Grove property to Ong Beng Seng

Singapore Companies
Published October 11, 2006

FJ Benjamin sells Orange Grove property to Ong Beng Seng

By UMA SHANKARI

FASHION retailer FJ Benjamin yesterday said that it has agreed to sell its property at 6B Orange Grove Road for $37 million to a private investment company owned by hotelier Ong Beng Seng.

FJ Benjamin said that it entered into a sale and purchase agreement with Mr Ong's Como House Pte Ltd on Monday.

The move is in line with FJ Benjamin's previously stated aim of divesting this non-core asset. Sale proceeds will be used to reduce gearing and as working capital for business expansion, the retailer said.

The five-storey building has 22,300 sq ft of lettable space. At its $37 million price tag, the price works out to $1,660 per sq ft - a premium of 23.3 per cent to the most recent valuation conducted in May 2006, said FJ Benjamin.

The property has a book value of $30.8 million as of June 30, 2006. The sale will result in a net gain of about $5.6 million - or 1.95 cents per share - for FJ Benjamin.

Assuming that the disposal had been effected at the end of the company's last financial year ended June 30, 2006, the net tangible assets per share of FJ Benjamin would have increased by 5.8 per cent to 32.3 cents, from 30.5 cents.

Right now, parts of FJ Benjamin's Singapore and regional operations occupy the building. FJ Benjamin will remain at the premises until mid-2007 by way of a short-term lease with Como House, the company said.

After that, it will have to move. Said a company spokeswoman: 'We are looking around. There are several locations available and we will be making a decision soon.' FJ Benjamin hopes to remain in a prime location, BT understands.

The fact that FJ Benjamin will have to clear out soon has led to speculation that Mr Ong intends to redevelop the site. Right now, the site is zoned for commercial use. But a residential development is likely to come up there in the future, especially since high-end projects in the prime districts are fetching high prices.

FJ Benjamin's shares closed 1.5 cents up at 58 cents yesterday.