ASCENDAS Real Estate Investment Trust (A-Reit) will acquire five industrial properties for $63 million, taking the total value of acquisition and development projects it has announced so far this financial year to $488 million spread across 20 buildings.
The Reit’s manager, Ascendas-MGM Funds Management Ltd (AMFML), yesterday said that it has signed separate put and call option agreements with electronics player Flextronics Group to buy five buildings.
Flextronics will lease back the properties for seven years with stepped annual rental increases and an option to renew for a further 10 years.
AMFML chief executive Tan Ser Ping said: ‘Given the strategic locations and the versatility of the properties, there could be opportunities to enhance and reposition the properties in the future.’
The properties are Flextronics Changi, Flextronics Kallang, Flextronics Woodlands Loop and Flextronics Woodlands Terrace, which comprises two buildings.
Flextronics will be responsible for rent, property tax, maintenance and utilities while A-Reit will pay lease administration fees. A-Reit will also incur acquisition costs amounting to $0.87 million, of which $0.63 million represents the acquisition fee payable to AMFML.
The acquisition of the properties will be accretive to A-Reit’s distributable income per unit.
The pro forma effect for the financial year ended March 31, 2006 will be an additional 0.05 cents per unit.
A-Reit has a portfolio of 76 properties in Singapore with a book value of about $3.1 billion.
At the end of the trading day, A-Reit closed at $2.55 per unit, up seven cents or 2.8 per cent from the previous day.
Source : Business Times - 2 Feb 2007
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