Sunway sells 30% interest in Singapore's Royal Square at Novena for S$39.9m

PETALING JAYA: Sunway Bhd's subsidiary is cashing out of its investment in the S$492.5 million Royal Square at Novena development in Singapore at a slight loss, a move which will allow it to use the proceeds of S$39.9 million for new projects which can generate a higher return on investment.
It said proceeds may be used for the S$70 million it needs to put up for the private residential property, Brookvale Park, announced in February 2018.
Sunway Developments Pte Ltd (SDPL), a unit of Sunway Holdings Sdn Bhd, entered into a sale and purchase agreement with Hoi Hup Realty Pte Ltd for the disposal of its 30% interest in Hoi Hup Sunway Novena Pte Ltd (HHSN) today.
Royal Square at Novena, comprises a hotel, medical units and retail units. It was completed on July 12, 2017 and approximately 70% of the medical and retail units have been sold. HHSN has recorded accumulated profits of S$132.5 million up to December 31, 2017 from the project. HHSN currently owns the hotel as an investment property.
The estimated loss on disposal is S$0.1 million after taking into consideration the net book value of Sunway’s investment in HHSN (which includes share of profit of S$39.7 million) as at March 31, 2018 of S$40.0 million.
Separately, in the event HHSN sells any unsold medical or retail units by April 30, 2018 at a price which exceeds the cost of development of the relevant unit plus a profit margin of 5%, SDPL shall be entitled to additional compensation.