SPH to sell non-core assets at 'right' time - Dec 03, 2005 (BT)
The Straits Times / The Business Times News On SPH
SPH to sell non-core assets at 'right' time
By Wong Wei Kong
Dec 03, 2005
The Business Times
SINGAPORE Press Holdings (SPH) will sell its non-core property assets at the right time so that it will be able to maximise returns for shareholders, the media group said yesterday at its annual general meeting (AGM).
SPH owns the Paragon shopping mall in prime Orchard Road as well as the Times Industrial property in the Thomson area. 'We would like to make sure we don't lose out by selling too soon. Property prices are starting to go up,' said SPH chairman Lim Chin Beng at the AGM. He said SPH has received offers for the Times Industrial property and is looking at them.
On whether SPH would put its properties in a real estate investment trust or Reit, Mr Lim said: 'You'll need volume. You'll need many buildings. If you go with one building, it will be a failure. Certainly, it is something the board is looking at all the time.'
Mr Lim noted that SPH is obtaining good returns from Paragon. The group has said earlier that the mall, valued at about $1.38 billion, gives a property yield of 4.8 per cent and an equity yield of over 10 per cent.
While properties values along Orchard Road may rise with the government planning a face-lift to the shopping belt, SPH CEO Alan Chan told reporters after the AGM that there was no rush to sell the Paragon property. 'It is still early days to make a decision on Paragon. We have to study all the angles,' he said. 'We will look at all our non-core assets at the appropriate time. We will find the most appropriate period in the judgment of the board.'
SPH also told shareholders at the AGM that it is considering alternatives to its employee staff option scheme, now that companies are required to account for options as an expense. Several consultants have already made presentations. 'We are studying alternatives to share options,' Mr Lim said.
Mr Chan noted that some companies have moved to granting performance shares, where employees are given stock grants when performance targets are met.
The AGM also marked the handover of the chairman position from Mr Lim to former deputy prime minister Tony Tan. SPH had earlier announced that Dr Tan will become its new chairman this month after Mr Lim indicated his decision not to seek re-election as a director and chairman of the group.
Addressing shareholders for the first time as SPH chairman, Dr Tan thanked both Mr Lim, who is stepping down after four years with SPH, and Mr Lim Kim San, who is stepping down as senior advisor after 17 years with the media group.
'Perhaps more than anyone else, Mr Lim Kim San is responsible for SPH as we know the company today,' said Dr Tan. 'In 1988, SPH had a net profit of about $73 million. This year, SPH's net profit was $495 million.'
'As the new chairman, I am committed to building on SPH's existing strengths,' he said.