Tat hong Heavy Equipment, a wholly-owned Tat Hong Holdings subsidary, has accepted the offer to surrender the lease of 11 Gul Crescent back to the landlord, Jurong Town Corporation (JTC) for 21 million Singapore dollars (15 million US dollars).
They have failed to sell the property to third parties buyers and had relocated its operations elsewhere.
The property has a site area of about 29,390 sqm with two single-storey office buildings, three single-storey warehouses and two other ancillary buildings. It has a remaining lease of about 25 years.
The firm announced in September 2013 that it would sell the property as parts of its plans to optimise operations in land-scarce Singapore. It had originally put the property up for sales at an indicative price of around 33 million Singapore dollars.
Related: Tat Hong sells property at 18 Sungei Kadut Ave
Offers received at that time were “not acceptable” and the property was withdrawn from the market, said Tat Hong. In May last year, it agreed to sell the property to Mini Environment Service for 25 million Singapore dollars but the sale fell through as “certain conditions were not fulfilled”.
In late November last year, Tat Hong said it was in talks with another potential buyer for the property.
While waiting for the sale of the property, the company proceeded with its plans to optimise its Singapore operations and relocated its crane storage and maintenance operations to other sites at Tuas Bay Drive, Tuas South as well as Kulaijaya, Johor.
The property had a net book value of 11.4 million Singapore dollars as at January 31 and Tat Hong will recognise a pre-tax gain on the disposal of 9.5 million Singapore dollars.
Last Friday, Tat Hong reported a net loss of 6.7 million Singapore dollars for the third quarter ended 31 December. This is owing to the weak demand in South-east Asia and Australia.
Revenue fell 19 percent to 124.8 million Singapore dollars in the quarter due to lower turnover across all its businesses, which include rentals of cranes, tower cranes, general equipment as well as distribution.
“The group is facing difficult economic and sectoral outlooks in its key markets and expects it performance to be depressed in the 2016 financial year,” Tat Hong said in a press statement Last Friday.
Tat Hong shares closed 1.5 cents higher at 43 cents before the announcement.
- Tat Hong unit sells back lease for $21m, The Straits Times, 16 February 2016.