Saizen REIT has secured a loan worth SGD8.9 million for its working capital.

Singapore’s only Japan-focused residential real estate investment trust Saizen REIT (SGX:T8JU) has entered into a conditional sale and purchase agreement with an independent private investor to sell High Grace II for JPY366.6 milliion (SGD4.2 million).

The 51-unit residential complex in Sendai was acquired in 2007 and last valued at JPY316 million (SGD3.6 million). High Grace II is said to have contributed about 0.8% (or approximately JPY 32.4 million) of Saizen REIT’s revenue in the financial year ended 30 June 2014.

“The divestment offers Saizen REIT an opportunity to realise High Grace II at a good price, and to rebalance its property portfolio with a view to enhancing the overall quality and growth potential”, the REIT said in an official statement regarding sale.

“Given the small size of High Grace II relative to the entire portfolio of Saizen REIT, the divestment is not expected to have any material impact on the financial position of Saizen REIT”, it added.

Upon divestment, Saizen REIT will have a portfolio of 136 residential buildings across Japan.

Units of Saizen REIT fell by 1.6% at the end of the trading day to close at SGD0.92 on the Singapore Exchange.

Saizen REIT property in Fukuoka which was also divested earlier in the year (Credit Saizen REIT)
Saizen REIT property to be divested in Fukuoka (Credit Saizen REIT)

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.