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Suntec REIT has inked a sale and purchase agreement with Maybank Kim Eng Properties to purchase and leaseback three floors of strata office space at Suntec Tower Two, showed an OCBC report.
The report noted that the purchase consideration amounts to S$101.6 million, while the total acquisition outlay is estimated to be S$105.7 million.
Notably, the acquisition is expected to generate a net property income (NPI) yield of around 3.9 percent – higher than the NPI yield of 3.2 percent seen last year for Suntec REIT’s portfolio.
“The estimated transaction price of ~S$2,605 per sq ft NLA appears fair, in our view,” it said.
OCBC also revealed that Suntec REIT earlier announced that it had “launched and priced S$105 million 2.83 percent notes due 2018 under its US$1.5 billion Euro Medium Term Note Programme.”
OCBC believes that the proceeds of the issuance will be used to fund the acquisition at Suntec Tower Two.
With this, OCBC maintained a hold rating for the REIT, with S$1.50 fair value estimate.
Nikki De Guzman, Editor at CommercialGuru, edited this story. To contact her about this or other stories email nikki@propertyguru.com.sg
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