Singapore’s only listed residential REIT, Saizen (SGX:T8JU), announced on 19 March that is has taken on a loan with The Shonai Bank of Japan for a sum of JPY260 million (SGD3 million).

The loan comes with a variable annual interest rate based on the lender’s short- term prime interest rate plus 0.5%. The prevailing interest rate is 2.475% per annum. Tenure for the loan is for 20 years up to 25 March 2035.

As collateral, Saizen REIT has put up two properties, Fantage Yaomate and Flocecer Miyagino, which are valued at an aggregate of JPY537million (SGD6.2 million).

“Loan proceeds will be deployed towards Saizen REIT’s working capital until such time when they are required for other purposes, which may include property acquisitions”, said the REIT in a statement on the loan. Following the drawdown of the loan, Saizen REIT’s gearing will be at 37%.

Units of Saizen REIT are currently listed on the Singapore Exchange at SGD0.85.