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AIMS APAC REIT to acquire property in Jurong Innovation District for $129.6 mil

By Felicia Tan

/ The Edge Singapore |

August 11, 2020 2:00 PM SGT

SINGAPORE (EDGEPROP) - The manager of AIMS APAC REIT (AAREIT) announced on Aug 11 that the REIT has acquired a master-tenanted four-storey ramp-up logistics warehouse at the Jurong Innovation District.

On Aug 7, AIMS APAC REIT (AAREIT) entered into a Put and Call option agreement to acquire 7 Bulim Street from Titan for a purchase consideration of $129.6 million.

The property, which is located in the Jurong West Logistics Cluster, will be acquired at an initial net property income (NPI) yield of 7.07%. The yield is based on the property’s NPI of $9.2 million in its first year of ownership.

The property will be acquired with an existing master lease to KWE, a wholly-owned subsidiary of a major Japanese freight forwarding and logistics group.

The current lease began on Jan 1, 2014, for a term of 10 years, with a five-year option for the master tenant to renew its lease at the then-prevailing market rate by June 30, 2023.

The manager says the proposed acquisition is expected to enhance AAREIT’s portfolio, increasing its Logistics and Warehouse cluster to 51.1% from 46.4%. Its overall portfolio occupancy rate will also increase to 94.2% from 93.6% on a pro forma basis.

“The Proposed Acquisition further strengthens AA REIT’s portfolio of industrial and logistics assets in Singapore, and is in line with our strategy to build a high-quality, diversified portfolio of assets that create long-term value for our Unitholders,” says Koh Wee Lih, CEO of the manager.

“The yield accretive acquisition will enhance the income of AA REIT’s portfolio amidst the current challenging market conditions, and the strong lease covenant and master tenant provides stability. The modern ramp-up warehouse presents an attractive long-term investment opportunity, as a strategically located property within the Jurong Innovation District, a first in this advanced manufacturing campus, with good connectivity to major expressways, and the future Tuas Mega Port and Checkpoint,” he adds.

As at 9am, units in AIMS APAC REIT were changing hands flat at $1.19.

This article, "AIMS APAC REIT to acquire property in Jurong Innovation District for $129.6 mil", first appeared on The Edge Singapore on August 11.

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