LHN joint venture to buy industrial property from Ascendas Reit for S$17m

A JOINT venture (JV) of Catalist-listed LHN will acquire a JTC industrial property located at 202 Kallang Bahru for some S$17 million plus goods and services tax from Ascendas Real Estate Investment Trust (Ascendas Reit).

The 50:50 JV is owned by LHN's wholly-owned subsidiary WPS KB and an unnamed firm which counts Oxley Holdings deputy chief executive Low See Ching as its ultimate sole shareholder.

The JV company on Jan 7 entered into a sale and purchase agreement with Ascendas Reit's trustee, after having signed a non-binding letter of intent on Nov 20, 2019.

LHN, which provides real estate managment services and logistics services, on Tuesday evening said it plans to manage the industrial property and use it for self-storage with automated retrieval and logistics, and as an ancillary office.

The property has a gross floor area of 20,465 square metres and a remaining tenure of more than 20 years.

The JV company will pay for the purchase sum using bank borrowings and its internal resources which are to be funded by its shareholders in equal proportions.

Mr Low and the unnamed firm in this JV are considered independent third parties and connected persons to LHN, the group said in a separate filing on Nov 19. The unnamed firm is also a shareholder of two of LHN's other JVs, Four Star Industries and Work Plus Store (AMK). Meanwhile, Mr Low, through another of his wholly-owned holding companies, is the ultimate shareholder of another JV by LHN, Metropolitan Parking.

The acquisition of the JTC industrial property is expected to complete on either Feb 14 or 14 days after JTC's final confirmation that it has no objections to the property transfer - whichever is later or as mutually agreed.

LHN said the transaction is not expected to have any material impact on the group's earnings per share or net tangible assets per share for the financial year ending Sept 30, 2020.

LHN shares closed at S$0.127 on Tuesday, up 0.1 Singapore cent or 0.8 per cent on a cum-dividend basis before the announcement.