ESR-REIT manager ESR Funds Management has announced that RBC Investor Services Trust Singapore (in its capacity as trustee of ESR-REIT) has completed the divestment of 11 Serangoon North Avenue 5 and 3C Toh Guan Road East for approximately $53 million.
This figure excludes divestment costs and GST, and represents a 3% premium to the total fair value of the two properties.
They are valued at $51.5 million as at 30 September 2021, and the $53 million divestment price also represents a 7.1% premium to their total acquisition price.
In a release on Nov 30, ESR-REIT says the divestment is not expected to have a material impact on its net asset value and net property income for the financial year ending 31 December.
Net proceeds from the divestment will be deployed to repay outstanding borrowings and/or fund upcoming asset enhancements, potential acquisitions, unit buy-back and general working capital requirements.
Adrian Chui, CEO and executive director ESR Funds Management added that the proceeds will be channelled towards value creation opportunities to improve the quality of the portfolio.
See also: CICT's manager proposes to acquire ION Orchard at $1.85 billion, subject to EGM
“With greater financial flexibility, we will continue to seize attractive growth opportunities to deliver greater income growth to unitholders.”
Following the divestment, ESR-REIT’s diversified portfolio will consist of 56 properties located across Singapore with a total gross floor area of approximately 15.3 million square feet.
11 Serangoon North Avenue 5 is a 6-storey multi-tenanted general industrial building located within the Ang Mo Kio Industrial Estate, with a remaining land lease tenure of approximately 35.7 years and a gross floor area of approximately 146,619 square feet.
See also: CICT's manager proposes to acquire ION Orchard at $1.85 billion, subject to EGM
Meanwhile, 3C Toh Guan Road East is a 5-storey multi-tenanted warehouse located within the Toh Guan Logistics Park.
Housing ancillary office space, the property has a remaining land lease tenure of approximately 29.5 years and a gross floor area of approximately 192,864 square feet.
Shares of ESR-REIT closed at 47 cents on 30 Nov, down 1 cent or 2.08% lower from its previous close.
