Singapore mainboard-listed industrial real estate investment trust Sabana REIT (SGX:M1GU) has received in-principle approval from the Singapore Exchange to issue up to 24,550,722 new ordinary units in the REIT to logistics company Adviva Distribution.

The issue relates to a potential acquisition of a property at 10 Changi South Street 2 in which Sabana REIT may opt to pay up to 45 per cent of the purchase consideration through the issuance of new units in the REIT to Adviva.

Sabana REIT announced in August that it is looking to acquire the six-storey warehouse with ancillary office space for for SGD50 million. Following that in September 2014, the REIT also indicated that it is looking to issue SGD100,000,000 worth of 4.25% fixed periodic distribution trust certificates due that will be due in 2019 with the purpose of partially funding the acquisition.

10 Changi South Street 2 is being sold by Adviva on a sale-and-leaseback basis. The initial annual net rent will be SGD4 million, subject to a rental escalation of 1.5 per cent per annum from the second year of the lease term.

The acquisition is expected to complete by the fourth quarter of 2014.