SINGAPORE (Mar 31): Ascendas Real Estate Investment Trust (Ascendas REIT) has acquired a 25% stake in business park property Galaxis for $102.9 million, the manager announced Tuesday.
Located at 1 & 3 Fusionopolis Place in Singapore’s one-north precinct, the property has a gross floor area (GFA) of 68,835 sqm and a net lettable area (NLA) of 60,752 sqm.
The remaining lease tenure of the land is around 52 years.
Galaxis comprises a 17-storey building with business park and office space, a two-storey retail and F&B podium, a five-storey building with work lofts, and a two-storey basement carpark.
The purchase consideration is based on 25% of the adjusted net asset value of Ascendas Fusion 5 (AF5PL), the holding entity for Galaxis.
The remaining 75% equity stake in AF5PL is held by a wholly-owned subsidiary of Ascendas REIT’s sponsor, CapitaLand.
The consideration takes into account the agreed value of the property of $630.0 million – some 3.1% lower than the independent market valuation of $650.0 million by CBRE as at March 26.
Ascendas REIT is also expected to incur an estimated total transaction cost of approximately $3.0 million, which includes stamp duty, professional advisory fees, and acquisition fees payable to the manager in cash.
The acquisition will be funded through a combination of debt and internal resources.
In the first year of the acquisition, the property is expected to generate a net property income yield of approximately 6.2% pre-transaction costs and 6.1% post-transaction costs.
Completed in 2015, the property is currently 99.6% occupied. Tenants include notable names such as Canon, Oracle, and Sea (formerly Garena).
As at March 26, the weighted average lease to expiry of the property is 2.5 years.
“Galaxis is strategically located in the heart of the bustling Fusionopolis cluster in one-north and has direct access to the MRT station, says William Tay, executive director and chief executive officer of the manager.
He notes that the property “fits well” with the REIT’s strategy to invest in well-located and high-quality business park properties in Singapore.
“The acquisition of the 25% stake in Galaxis is accretive to Ascendas REIT’s distribution per unit and is transacted at an attractive net property income yield of 6.2% considering the allowable 30% White Component for the site,” Tay says, adding that it will strengthen Ascendas REIT’s overall portfolio.
Units in Ascendas REIT closed 12 cents higher, or up 4.4%, at $2.83 on Tuesday, before the announcement.
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