Singapore-listed industrial landlord Ascendas REIT (A-REIT) (SGX:A17U) has announced that it will divest a warehouse it purchased for S$22.5 million in 2007 for a sale price of S$32 million this year. This represents a premium of 42 percent over the purchase price for the warehouse located at 6 Pioneer Walk, Singapore.

Ascendas REIT currently has 103 properties in Singapore and a business park in China with a total portfolio of about S$7 billion as of March 2013.

The a 2-storey warehouse with a ramp-up driveway and a 4-storey ancillary office has a book value of S$24.6 million as at 31 March 2013 with a remaining land tenure of about 23 years. It will be sold to logistics provider GKE Private Limited.

With the sale, A-REIT’s proforma gross revenue and net property income would reduce by S$1.9 million and S$1.6 million respectively for financial year 2012/2013. Sale proceeds from this divestment may be used to repay existing indebtedness, working capital purposes or distribution to unit holders.

Units of A-REIT are currently trading at S$2.73 on the Singapore Exchange.

By Ridzwan Rahmat

Ridzwan has been analysing REITs and business trusts since 2008, and personally manages a portfolio comprising mainly of SGX-listed REITs. He founded REITsWeek in 2013.