Bookmark & Share
AIMS AMP Capital Industrial REIT (AA REIT) has agreed to sell an industrial property at 10 Soon Lee Road (pictured) for $8.17 million, revealed an SGX filing on Monday (15 January).
Located in Jurong Industrial Estate, the property comprises a detached single-storey industrial building and another four-level industrial building with an ancillary office block. These have a combined net leasable area of 7,224.20 sq m, and have a remaining land lease tenure of under 24 years.
AA REIT revealed that property is its smallest asset. Aside from being the only property in its portfolio that is valued at less than $10 million, it also contributed merely 0.8 percent of the trust’s annual gross rental income for the fiscal year ended 31 March 2017.
Nevertheless, the selling price represents a 28 percent premium over the property’s $6.4 million valuation by CBRE as of 30 September 2017.
“A strategic review of the portfolio shows that the property is ready for divestment. This is in line with our capital recycling strategy and will give us enhanced financial flexibility, allowing us to further strengthen AA REIT’s balance sheet and capital structure,” said Koh Wee Lih, CEO of AIMS AMP Capital Industrial REIT Management.
AA REIT plans to use the net proceeds from the sale to trim down its existing loans and create additional debt headroom for future opportunities like acquisitions, development and property upgrades.
“The sale is subject to approval by JTC Corporation and is expected to be completed by the end of the current financial year,” it noted.
Following the divestment, AA REIT will own 26 properties across industrial hubs in Singapore and New South Wales, Australia.
In addition, its portfolio occupancy level is expected to rise, on a pro forma basis, to 89 percent from 88.8 percent as of 30 September 2017, while aggregate leverage is anticipated to decline from 37.3 percent to 33.3 percent, thanks to the sale and the recent $55 million private placement.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg
Related Articles:
Nordic Group plans to buy Tuas Avenue property for $6.2m
Mapletree Logistics Trust gains full ownership of Hong Kong property