Singapore-listed Soilbuild Business Space REIT (SGX:SV3U) announced on 12 March that it has entered into a sale and purchase agreement with Technics Offshore Engineering to acquire 72 Loyang Way for SGD97 million.
The property consists of two blocks of 3-storey and 4-storey ancillary office, two high ceiling single-storey production facilities, a blasting and spray painting chamber, a 200 worker dormitory and a jetty with 142 metres of sea frontage which serves as a fully-integrated offshore supply base.
72 Loyang Way is situated on a number of JTC leasehold estate land titles which collectively expire on 20 March 2038. The remaining tenure for the property is approximately 23 years.The estimated total cost of the proposed acquisition is approximately SGD98.12 million.
The REIT has described the acquisition as one that is in line with its aim of investing in income-producing real estate assets. “The property is suitable for a wide range of end users in the marine & offshore, oil & gas industry as well as other heavy industrialists who require heavy floor loading and waterfront jetty for loading / unloading of oversize and overweight cargo”, it said in a statement.
Upon acquisition, the property will be leased to Technics Offshore Engineering for a term of 15 years with rental payable for the first year set at SGD7.87 million. The lease will be on a triple net basis and subject to a rental escalation of up to 2.25% every year starting from year three.
The acquisition, which will be funded with a combination of equity and debt, will increase the weighted average lease expiry of Soilbuild REIT’s portfolio from 4.1 years to 5.4 years. The REIT has indicated that a further announcement will be made once the acquisition is complete.
Units of Soilbuild Business Space REIT are currently listed on the Singapore Exchange at SGD0.80.