Yangzijiang Shipbuilding - CGS-CIMB Research 2023-03-30: One-off Singapore Office Building Purchase

• Yangzijiang Shipbuilding (SGX:BS6) the acquisition of Singapore freehold office building 39 Robinson Road (a 21-storey freehold commercial building located in the financial district with a GFA of 15,723.92sqm) at S$399m, funded by internal cash reserves. See Yangzijiang's announcement dated 30 Mar 2023.

Why buy an office building?

• - Read this at SGinvestors.io -
• The aggregate value of the consideration was ~S$401m but due to the time-sensitive nature and urgency of the transaction, there was no available valuation obtained and the final value was determined on a willing-buyer-willing-seller basis, taking into consideration a prompt settlement and internal valuation.
• - Read this at SGinvestors.io -
• The rationale provided by Yangzijiang for the purchase included
  1. a hedge against the expected continued inflation globally, as it would provide stable cashflow so as to minimise fluctuations in returns and
  2. capitalising on any potential capital gains from the appreciation of the freehold property.

One-off opportunistic deal?

• Read more at SGinvestors.io.

LIM Siew Khee CGS-CIMB Research | Izabella TAN CGS-CIMB Research | https://www.cgs-cimb.com 2023-03-30 SGinvestors.io

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