Singapore-listed industrial REIT AIMS AMP Capital Industrial REIT (SGX:O5RU) has entered into an agreement with its tenant Aalst Chocolate to undertake customised asset enhancement initiative (AEI) at 26 Tuas Avenue 7.

The two-storey building, valued at $10.3 million, is currently a purpose built chocolate factory with mezzanine office space. After the AEI, the factory will have an additional production line and extra storage space.

The AEI will cost SGD1.19 million, and will be funded from proceeds from the recent rights issue. Annual rental income for the property will rise from current SGD0.87 million to SGD1.05 million at the start of new term, providing a return on investment of 10%.

By providing a customised property solution, the tenant will extend the current 10 year leasing term for another five years, until 18 April 2022, with agreed stipulated rental escalations in the new lease terms.

Units of AIMS AMP Capital Industrial REIT closed the trading day at SGD1.42 on the Singapore Exchange.