SINGAPORE - Yangzijiang Shipbuilding said on Wednesday that a subsidiary will acquire 39 Robinson Road, a 21-storey freehold commercial building in Singapore’s Central Business District, for $399 million.

The purchase is meant for the Chinese shipbuilder to deepen its roots in Singapore, said executive chairman and chief executive Ren Letian.

“Having been listed on the Singapore Exchange mainboard for 16 years and being an STI (Straits Times Index) component company, the acquisition gives us an opportunity to deepen our roots in Singapore with our very own office building,” he said.

“Furthermore, considering the highly inflationary environment, we see this as a good vehicle to preserve our existing capital over the long term while also providing us stable rental cash flow.”

Mr Ren, however, stressed that this is a “one-off exercise”.

“Our focus remains on the core shipbuilding business,” he said.

Nevertheless, Mr Ren noted that a professional real estate manager will be appointed to manage the marketing activities and operations of the building, with the idea of branding it a financial hub to attract tenants such as institutional investors and family offices.

As part of the acquisition, real estate company 9Co Parker and boutique investment firm ICH Singapore had earlier taken up equity interests of 10 per cent and 9 per cent respectively in Yangzijiang Realty, with the intention of entering into the deal together.

The $399 million value for the property took into consideration “prompt settlement” as the group is able to tap its strong internal cash reserves without having to rely on external financing, it stated.

Shares of Yangzijiang Shipbuilding were trading down one cent, or 0.8 per cent, at $1.23 as at 10.45am on Thursday. THE BUSINESS TIMES