Saizen REIT property to be divested in Fukuoka (Credit Saizen REIT)

Singapore’s only Japan-focused residential REIT, Saizen, announced on 19 May that it will be divesting a fourteen-unit residential property in Japan to an undisclosed independent private investor for JPY60 million (SGD0.7 million).

The property to be disposed is Saumur Meinohama II located in Fukuoka and built in 1991. The REIT has described the amount it will receive for the divestment as a “good price” considering that an independent valuation has put the property’s price at JPY50.4 million (SGD0.6 million) using the direct valuation method. This translates into a premium of approximately 19%.

The independent private investor has paid a deposit of JPY1 million (SGD10,000) for the property.

Saizen REIT said that the divestment is not expected to have any material impact on its financial position as the property contributed about 0.1% (or approximately JPY 2.6 million) of Saizen REIT’s revenue in the nine-month financial period ended 31 March 2014.

Management for the REIT has also indicated that cash received from the sale will be used to in whole towards operations of the REIT or for further property acquisitions.

Units of Saizen REIT closed the trading day half a percentage point higher on the Singapore Exchange at SGD0.93.

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.