CapitaLand Ascendas REIT Management Limited, the manager of CapitaLand Ascendas REIT (CLAR), announced that HSBC Institutional Trust Services (Singapore) Limited, acting as trustee of CLAR, has entered into a sale and purchase agreement to sell 21 Jalan Buroh in Singapore to GDS IDC Services Pte. Ltd. for S$112.8 million.
The property, a three-storey ramp-up warehouse with a seven-storey ancillary office block, is being sold at a premium over its original purchase price of S$58.4 million when CLAR acquired it in June 2006.
The sale price also exceeds the average of two independent market valuations, which stood at S$67.5 million as of July 1, 2024.
The divestment aligns with the manager’s strategy to enhance the quality of CLAR’s portfolio and optimize returns for unitholders.
The transaction is not expected to have a material impact on CLAR’s net asset value or distribution per unit for the financial year ending December 31, 2024.
Net proceeds after divestment costs are estimated at S$102.9 million. CLAR plans to use the funds for various purposes, including financing committed investments, reducing debt, extending loans to subsidiaries, funding general corporate and working capital needs, or distributing to unitholders.
If the divestment had been completed on January 1, 2023, the pro forma impact on CLAR’s net property income and distribution per unit for the financial year ended December 31, 2023, would have been a decrease of S$4.6 million and 0.085 Singapore cents, respectively.
Additionally, if the net proceeds were used to repay borrowings as of December 31, 2023, CLAR’s aggregate leverage would have reduced from 37.9% to approximately 37.4%.
The transaction is expected to be completed in the fourth quarter of 2024. Following completion, CLAR will own 228 properties, comprising 96 in Singapore, 34 in Australia, 48 in the United States, and 50 in the United Kingdom and Europe.
PEVCJournal.com