Sakae

[namaste]

Sakae Owns approx 24% of JV company which brought this building back in early 2010 for $46M. I say they have foresight to go into commericial property when most people were gunning for residential properties.

Can someone advise me where can i check commericial property transactions ?


North Bridge Commercial Complex for sale by tender

BY JOHN • MARCH 1ST, 2011

North Bridge Commercial Complex For Sale by Tender

The site has the potential to be remodeled into a boutique office or retail development, with the opportunity for individual unit sale.
DTZ has been appointed the sole marketing agent for the collective sale of North Bridge Commercial Complex at 470 North Bridge Road, Singapore.

The sale is being conducted through a tender exercise which will close on Thursday, 3 March 2011, 3 pm.

Owners with more than 90% of the total strata area and share values have given their consent to the collective sale, according to a DTZ report.

The property enjoys a wide and prominent frontage along North Bridge Road, and is very conveniently located with three MRT stations serving the area – City Hall MRT Interchange, Bugis MRT Station and the future Bugis Station on the Downtown Line. Strategically located in a vibrant neighbourhood, prominent developments nearby include the popular Bugis Junction, Inter-Continental Hotel, Raffles Hotel, upcoming South Beach project, Raffles City, amongst others.

It is highly accessible via Beach Road, Middle Road, Rochor Road, Bras Basah Road, Nicoll Highway and East Coast Park Expressway.
The freehold property sits on a land area of 1,079.1 sq m (11,615 sq ft) approximately. According to the Master Plan 2008, the site is zoned ‘Commercial’ at plot ratio 4.2, with building height of up to 6-storey. This translates into a total gross floor area of approximately 4,532.2 sq m (48,784 sq ft) approximately. The development is a 6-storey commercial block with existing gross floor area of 6,188.67 sq m (66,614 sq ft) approximately.

Shaun Poh, DTZ’s Senior Director for Investment Advisory Services and Auction commented: “There has been no similar property offering in the vicinity recently and we expect the property to attract keen interest from investors and developers. Given the site’s central and convenient location and its prominent frontage, the property has the potential to be revamped into a boutique office or retail development, with the opportunity for individual unit sale which has been well sought-after by retail investors. Shop units at The Bencoolen have recently changed hands at $3,500 to $5,300 psf and at Sim Lim Square up to $9,000 psf. Other possible development options include Residential use with Commercial at first storey and for Hotel use, subject to planning approval.”

[namaste]

I was looking around for the estimated/expected sales price, in order to ascertain the gain for Sakae. From the estimate below, Sakae's gain should be much more than their 2010 grosss profit before income tax of 3.3M.


source: CommercialGuru.com.sg


DTZ has announced that the freehold North Bridge Commercial Complex, located along North Bridge Road, is up for sale, with an expected price tag of S$110 million to S$115 million.Zoned for commercial use, the site has a total area of 1,079.1 sq m and a maximum gross floor area (GFA) of 4,532.2 sq m, with a gross plot ratio of 4.2.

Based on sale price expectations, this translates into a psf ppr cost of S$2,225 to S$2,357.

The plot has a buildable height of up to six storeys, said DTZ. It currently houses a six-storey commercial block with an existing GFA of 6,188.67 sq m.

Shaun Poh, Senior Director for Investment Advisory Services and Auction at DTZ, said, “There has been no similar property offering in the vicinity recently and we expect the property to attract keen interest from investors and developers.”

With the plot’s central location, along with its prominent frontage and proximity to the Bugis and City Hall MRT stations, the property has the potential to be restored into a boutique office, said Mr. Poh, adding that it can also be converted into a retail development.

“Shop units at The Bencoolen have recently changed hands at S$3,500 to S$5,300 psf and at Sim Lim Square up to S$9,000 psf,” he said. Other possible development options for the site include a hotel, which is subject to planning approval, he added.

The tender for the site will close on March 3.

[namaste]

Of course, the above developement (not done yet as it is not a given that it's a sure sale) is not adequate for an investment. We need to look at the core business and other aspects of their balance sheet.

On the financial front, Revenue is flat (FY2010 vs FY2009) and net margin is lower due to m’sia tax withholding – cause for concern.

However, 2 strategic moves on property in the last few years have made this counter defensive.

(1) Disposal of old HQ and purchase of land + new HQ building completed with huge Sakae signage (at the junction of Macpherson / opposite Tai Seng MRT; very prominent). The valuation of the new property must be worth much more than the 20M carried on Sakae’s books currently. Could be used for rental or divestment to an REIT. (just speculating; don’t know their plans as there is no mention on the last FY2010 Financial Results)

(2) JV for the purchase of North Bridge Commerical Complex. Currently awaiting tender results closed on 3rd March 2011. Though is not certain that this will be a sale but their entry price is very low, which could make very decent rental yield for renting.

Therefore, I say that they have successfully made some degree of hedge during this inflationary environment.

This company also have a decent track record of paying 0.5c to 1.5c dividend annually + special dividend on occasion (after FY2006).
FY2010 (1.5c), FY2009 (0.5c), FY2008 (none, lost $), FY2007 (1c), FY2006 (1 + 3.5c).

In the event that they successfully sold North Bridge Industrial complex, we should expect a special dividend payout.

Alas, the bid and ask spread for this thinly traded counter is just incredibly huge; at time to writing today 19c vs 27c ???!!!!

[namaste]

Bid/Ask Prices have narrowed in the past few days. This is for reasons linked to the food related concern from the fallout of the radiation from the fukushima Daiichi nuclear plan.

(1) on the cost side, total cost of purchase of raw materials from Japan has increased by 20% - i chanced upon a sin min newspaper interview with sakae's CEO

(2) on the demand side, they are talks to avoiding japanese food for the moment among my collegues. This is unfounded at this moment as the authorities are testing it.

A walk around japansese food outlets around town would be a possible gauge of the sentiment at this moment.

Please approach with care as there is already impact to its core business and might get worse as the situation in japan is not cleared up yet.

[namaste]

Things seem to have cleared up post-Japan’s most serious earthquake.

A few notes from AGM convened earlier in the week.
(1)Sakae take a serious view of food sources and they take control of key items by sourcing direct (e.g. Salmon) and they maintain dual sources (e.g Salmon from Norway and Chilean). The CEO pointed us to his company’s food sourcing policy on the first page of their menu.
(2)Many investors were concerned about their re-entry into US market printed in the 2010 AR and questioned the company about the rationale and scale. We were concerned because the company actual “chaptered 11” their US subsidiary a year ago. The company clarified that this “re-entry” points to re-starting the 2 shops that were “chaptered 11” – the cost of PPE and associated admin have already been written off.
(3)All resolutions were passed including a share buy-back item which seems to be a white elephant that has been there for at least the last 3 years but Sakae have not acted upon.
(4)They are not able to comment on the property sale in north bridge road as they are now in a “quiet period” – apparently there Is such thing as a quiet period after en bloc sale.
(5)CEO mentioned he has no plans to sell its current HQ building to REIT, although a few REIT has contacted them.
(6)The current HQ building is a 7-story building. Sakae housed its admin ops on the 7th floor. The 6th and 5th floors are rented out to addvalue tech and sunrise academy (complimentary to sakae as it can send its staff for upgrading). The 2nd level is car park and 3rd/1st level are for sakae’s own use – warehouse and central kitchen.

[KopiKat]

CAD very busy these days....

MATTERS CONCERNING THE COMPANY’S ASSOCIATE COMPANY - GRIFFIN REAL ESTATE INVESTMENT HOLDINGS PTE LTD

[yeokiwi]

CAD very busy these days....

MATTERS CONCERNING THE COMPANY’S ASSOCIATE COMPANY - GRIFFIN REAL ESTATE INVESTMENT HOLDINGS PTE LTD

CAD no time to lim kopi. Have to drop down to Kingsmen and Sakae to lim.
Sakae is better. still can eat some sushi.


Mr. Foo recently appointed a reputable international firm of accountants to inspect the accounting records and report on the financial affairs of GREIH (the “Accountants’ Report”), arising from concerns over certain transactions undertaken in GREIH which had come to the notice of Mr. Foo.


I think Mr Foo is already suspicious of some monkey business.

[Contrarian]

He published in papers pay $3000 hire cleaner. End up papers say $1500 only with basic, the $3K include agent fees, OT, etc. etc.
The HR department further clarify.

The job can easily scald the cleaners, when the reporter tried out.

This is the time I respect the papers.

[pianist]

Sakae non-exec director asked to resign
The Business Times
Monday, Feb 04, 2013

SINGAPORE - Two weeks after external auditors of Sakae Holdings Ltd flagged financial irregularities at an associate firm, Andy Ong Siew Kwee, a non-executive director of Sakae, which owns the Sakae Sushi chain, has been asked to resign from its board. In a filing with the Singapore Exchange last night, Sakae revealed that Mr Ong, who managed Griffin Real Estate Investment Holdings, had been identified as the person responsible for "various undisclosed irregular financial transactions . . . undertaken in (Griffin)" that may be in breach of the Companies Act.

The board has asked Mr Ong to tender his resignation within seven days from Feb 1. If it does not receive his resignation in 14 days, it will convene an extraordinary general meeting to remove him from his position, Sakae said.

Mr Ong could not be reached for comment.

Sakae said in an earlier statement that the suspicious transactions were also in breach of a Sept 3, 2010, subscription and joint-venture agreement, and "may adversely affect (Sakae's) interests and the value of its investments" in the company.

An international accounting firm commissioned by Sakae executive chairman and CEO Douglas Foo Peow Yong to investigate Griffin's accounting records reported that the suspicious transactions included payments of substantial sums that have been made by Griffin and "apparent contracts which purport to oblige (Griffin) to make substantial payments to companies majority-owned or controlled by Mr Ong".

Sakae said that these transactions had not been properly disclosed to Sakae and Mr Foo, who is also the company's representative on Griffin's board. "As a director of the company, Andy Ong has both statutory and fiduciary duties that require him not to act against the interests of the company, and/or not to place himself in a conflict of interest position."

In recommending Mr Ong's resignation, Sakae's nominating committee, which includes Mr Foo, cited the findings of the accounting firm's report, a written complaint filed by Sakae's lawyers to the Commercial Affairs Department, as well as a confidential report on Griffin that had earlier been submitted to the Minister of Finance.

Under Section 207(9A) of the Companies Act, an auditor of a public company or a subsidiary of a public company, has a legal duty to report to the Minister of Finance immediately if he has reason to believe that a serious offence involving fraud or other dishonesty has been committed against the company by officers or employees of the company.

Sakae said that it believed that Mr Ong should not be permitted to be present at board meetings or be privy to discussions and decisions by the board regarding the ongoing investigations and other confidential matters concerning Griffin and him.

Mr Ong is also chief executive officer of ERC Holdings, which runs various businesses in education, training and property investments. According to ERC's website, he is a sought-after financial authority and had appeared frequently on CNBC, Bloomberg and Channel News Asia to speak on financial management issues.

[Ray168]

In Oct 2009, I attended the property investment consortium briefing by Andy Ong. The investment property is the building where ERC currently occupy in the bugis area.

He said Douglas Foo will be one of the SSH. This had somehow boosted reputation and confident level; and hence some people put their money into the consortium (min 50K).

Andy raise his consortium money by selling this concept to all his students who attended his Property Investment Program.

I did not buy the idea and hence did not invest in it. I don't feel comfortable as there are still some techinical issues unsolve. On hindsight, it is the accounting transparency.

Lesson learn is that if I don't know about the product or not comfortable with it, I will pass the 'opportunity'.