OUE Reef Development, an indirect fully-owned subsidiary of OUE, has entered into a sale and purchase agreement with Dr Riady for the sale of a 3,182 sq m lot at Nassim Road, including the property built on the land.
The property developer noted that the sale is made “in the ordinary course of business of the group”.
OUE Reef Development bought the Nassim Road land in 2016. It then developed the lot, with the temporary occupation permit for the GCB obtained on 6 August 2019.
Using the comparable sale method, Cushman & Wakefield VHS valued the property – on the basis of market value – at $87 million, while Knight Frank valued it at $85.5 million using the direct comparison method.
Based on the property’s independent valuations, the average market value is about $86.25 million. As such, the $95 million consideration is 10.1 percent higher than the average market value.
The company’s audit committee is “of the view that the terms and conditions of the transaction are fair and reasonable, on normal commercial terms, and are not prejudicial to the interests of the company and its minority shareholders”.
And since Dr Riady is an interested person, he has recused (and will continue to recuse) himself from the decision making of the Board in relation to the transaction.
Dr Riady has a deemed interest in around 68.65 percent of OUE’s issued shares (excluding treasury shares).
OUE does not expect the transaction to materially affect the group’s net tangible assets or the earnings per share for the financial year ending 31 December 2019.