Singapore-listed industrial REIT, Cache Logistics Trust (SGX:K2LU), announced on 2 June that it has accepted an offer from JTC Corporation for the surrender of lease at 4 Penjuru Lane for a consideration sum of SGD9.7 million.

4 Penjuru Lane is the site of Kim Heng Warehouse, a single-storey property with a gross floor area (GFA) of 54,000 square feet and remaining land lease tenure is approximately 27 years.

The property was acquired in 2011 for SGD8.9 million and was valued at approximately SGD9 million as at 31 December 2014. The consideration sum represents a 9% premium over the original acquisition price.

The REIT has described the divestment as being in line with its asset management strategy. “Kim Heng Warehouse is the smallest property in our portfolio. Despite potential for redevelopment, given the property’s limited future income growth and considering the offer at hand, strategically divesting optimises returns and provides Cache with opportunity to recycle its capital”, said Daniel Cerf, CEO of the REIT’s manager.

The proposed divestment is expected to complete by June 2015. Proceeds from the property’s sale will be used to reduce existing debt, fund general and corporate working capital or distribution, said the REIT.

Following the divestment of Kim Heng Warehouse, Cache will own 16 logistics warehouse properties, including the soon-to-complete build-to-suit logistics warehouse development for DHL Supply Chain Singapore, with a total property value of approximately SGD1.2 billion and a GFA of 6.7 million square feet.

Units of Cache Logistics Trust are currently listed on the Singapore Exchange at SGD1.16.