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Long House Food Centre Gobbled Up by TEE Land

tee landOne of the icons of Upper Thomson Road has to be Long House Food Centre. The food centre that sells some famous dishes such as prawn noodles and goreng pisang has now been sold to property developer, TEE Land Limited (SGX: S9B), for a cool sum of S$45.2 million.

The freehold site has a land mass of around 1,576 square metres and has a maximum plot ratio of 3 (Gross Floor Area divided by Site Area). Thus, the acquisition amount divides up to $888 per square foot per plot ratio (what an auspicious number!).

TEE Land intends to re-develop the property into a commercial cum residential development and the acquisition is aligned with the company’s strategy to further expand itself in Singapore.

It was reported in The Straits Times that the site was bought in 1980 by a late Ng Aun Khim at a mere S$678,000. At a selling price of S$45.2 million, it translates to a compounded annual return of 13.6%. To put things into perspective, the Straits Times Index (SGX: ^STI) returned around 10% compounded per annum for the past 10 years.

Separately, the company announced its latest quarter earnings the day before. For the first half of 2014, the revenue rose more than two-fold over the previous year to S$16 million. The net profit shot up more than three times to $2.2 million. It is paying out 0.5 Singapore cents per ordinary share for the quarter.

The shares at TEE Land last traded at $0.325 on Thursday and it has a historical PE ratio of 53.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Sudhan P doesn’t own shares in any of the companies mentioned.