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ESR-REIT has agreed to acquire 8 Tuas South Lane for $95 million.
Located near Tuas Biomedical Park, the property comprises five detached factories, four blocks of dormitory buildings and one block of eight-storey warehouse. It has a gross floor area of around 72,569 sq m as well as a remaining land tenure of 20 years.
In an SGX filing, the trust’s manager revealed that the “vendor and Hydrochem (S) Pte Ltd (collectively ‘Hyflux’) will collectively leaseback a majority of the space for 15 years”.
“Hyflux is a Singapore company with an international footprint and is a globally-recognised brand. We are pleased to have Hyflux join our tenant network,” said Adrian Chui, CEO of the trust’s manager.
“The asset’s long leaseback term and strong tenant covenants will further support our objectives of maximising our portfolio returns and delivering strong and stable long-term distributions to our unitholders.”
And given the property’s close proximity to the future Tuas Megaport, the manager expects the transformation of the Tuas area for port development to “increase the attractiveness of the property to enjoy upside potential”.
“The manager currently intends to finance the total acquisition cost through debt financing. However, the manager may finance the total acquisition cost via a combination of cash from divestment proceeds, equity, debt and/ or hybrid securities. The proportion and mode of financing will be determined closer to completion,” it added.
This article was edited by Keshia Faculin.
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