AIMS AMP Capital Industrial REITSs (AA REITs) manager announced on Monday 15 Jan that AA REITSs is divesting a factory building in Jurong Industrial Estate for S (Singapore Dollar) $8.17 million. It had entered into an agreement for the divestment of the property at 10 Soon Lee Road through its trustee HSBC Institutional Trust Services (Singapore) on Jan 12.
The property at 10 Soon Lee Road - purchased during AA REITs's initial public offering in April 2007 - contributed 0.8 per cent of the annual gross rental income for the financial year ended March 31, 2017.
It is AA REITs's smallest asset and the only property in AA REITs's portfolio that is valued below S$10 million. The sale is subject to approval by JTC Corporation and is expected to be completed by the end of the current financial year.
Koh Wee Lih, chief executive of the manager, said that 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 REITs's balance sheet and capital structure." He said.
The sale price of S$8.17 million represents a 28 per cent premium over the property's latest valuation of S$6.4 million. Net proceeds from the divestment will be used to pare down existing debt to reduce aggregate leverage and create additional debt headroom for future acquisitions, asset enhancement initiatives or development opportunities, said the manager in a bourse filing after markets closed.
It sits within an established industrial estate on the southern side of Soon Lee Road, off International Road in the Jurong Industrial Estate, and has a net lettable area of 7,224.2 square metres over a detached single-storey industrial building and a four-storey industrial building with an ancillary office block. The property has a remaining land lease tenure of less than 24 years.
Following the divestment, AA REITs's portfolio will consist of 26 properties in strategic industrial hubs across Singapore and in New South Wales, Australia. Portfolio occupancy rate will increase from 88.8 per cent as at Sept 30, 2017 to 89 per cent on a pro forma basis. With the divestment and AA REITs's recent S$55 million private placement, its aggregate leverage will also decrease from 37.3 per cent as at Sept 30, 2017 to 33.3 per cent on a pro forma basis.
AA REITs closed unchanged at S$1.36 on Monday, before the announcement was made. （End）
The property at 10 Soon Lee Road - purchased during AA REITs's initial public offering in April 2007 - contributed 0.8 per cent of the annual gross rental income for the financial year ended March 31, 2017.
It is AA REITs's smallest asset and the only property in AA REITs's portfolio that is valued below S$10 million. The sale is subject to approval by JTC Corporation and is expected to be completed by the end of the current financial year.
Koh Wee Lih, chief executive of the manager, said that 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 REITs's balance sheet and capital structure." He said.
The sale price of S$8.17 million represents a 28 per cent premium over the property's latest valuation of S$6.4 million. Net proceeds from the divestment will be used to pare down existing debt to reduce aggregate leverage and create additional debt headroom for future acquisitions, asset enhancement initiatives or development opportunities, said the manager in a bourse filing after markets closed.
It sits within an established industrial estate on the southern side of Soon Lee Road, off International Road in the Jurong Industrial Estate, and has a net lettable area of 7,224.2 square metres over a detached single-storey industrial building and a four-storey industrial building with an ancillary office block. The property has a remaining land lease tenure of less than 24 years.
Following the divestment, AA REITs's portfolio will consist of 26 properties in strategic industrial hubs across Singapore and in New South Wales, Australia. Portfolio occupancy rate will increase from 88.8 per cent as at Sept 30, 2017 to 89 per cent on a pro forma basis. With the divestment and AA REITs's recent S$55 million private placement, its aggregate leverage will also decrease from 37.3 per cent as at Sept 30, 2017 to 33.3 per cent on a pro forma basis.
AA REITs closed unchanged at S$1.36 on Monday, before the announcement was made. （End）
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