BT : UIC pays $160m in DC to redevelop UIC Building

Business Times - 31 Aug 2010

UIC pays $160m in DC to redevelop UIC Building

By FELDA CHAY

UNITED Industrial Corp (UIC) yesterday said that it has paid a development charge of $160.1 million to the Urban Redevelopment Authority (URA) for the redevelopment of UIC Building.

Located at 5 Shenton Way, the building will be redeveloped based on a 60 per cent residential and 40 per cent commercial scheme with a gross floor area of about 926,589 sq ft, said UIC in a statement.

It added that the redevelopment will be financed by internal funds and bank borrowings, and is not expected to have any material impact on the net tangible assets and earnings per share of the group for the current financial year ending Dec 31.

The news comes after the company said in February that it had won in-principle approval from the URA to convert the building into a mainly residential development.

It was undecided on how exactly to redevelop the property at that time, with UOL group chief executive Gwee Lian Kheng saying that it was assessing all alternatives to ensure the best use for the property.

Its announcement in February came at a time which saw numerous property developers opting to convert office buildings in the central business district for residential use amid climbing luxury home prices, and falling office rents - though the office rental market is now on the mend.

Standard Chartered Bank's head of Asean property research Regina Lim said to BT earlier this month that the average monthly Grade A office rental value will end the year at about $10.20 per square foot, up 26 per cent from end-2009.

Earlier this month, UIC reported that net profit rose to $79.1 million for the second quarter from a net loss of $251.8 million a year ago.

Revenue rose 7 per cent to $291.8 million from $271.5 million in the corresponding period last year.

The quarter saw it book fair-value gains of $19.8 million on investment properties held by subsidiaries, as opposed to fair-value losses of $526.1 million a year earlier.

Yesterday, UIC's counter closed one cent lower at $2.18.

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