Singapore-listed industrial REIT, Soilbuild Business Trust, announced on 26 May that it has received SGD11.8 million in cash after claiming a bank guarantee equivalent to 18 months of rent for its property at 72 Loyang Way.

The REIT was successful with the claim after Singapore’s High Court dismissed a bid by Technics Oil & Gas Limited to restrain a call on the bank guarantee on 25 May.

The bank guarantee was held as security deposit by DBS Trustee Limited in its capacity as trustee of Soilbuild REIT. Technics Oil & Gas Limited is the lease guarantor of Technics Offshore Engineering Pte Ltd, the latter of which is occupying 72 Loyang Way.

Soilbuild REIT has earlier commenced legal action against Technics Offshore Engineering, claiming a sum of SGD2.19 million for default in payment of rent, the security deposit for the second year of lease amounting to SGD11.8 million, and other costs.

“Following the receipt of the cash under the bank guarantee, the manager does not expect there to be an immediate financial impact on Soilbuild REIT’s distribution per unit for the current financial year”, said the REIT in a statement on the cash receipt.

72 Loyang Way is a seafront industrial property that was acquired by Soilbuild REIT in mid-2015 from Technics Offshore Engineering for SGD97 million in a sale-and-leaseback arrangement.

The agreement was for Technics to rent the property for a term of 15 years at SGD7.87 million per year, and a rental escalation of up to 2.25% every year starting from year three. The property has a remaining tenure of about 22 years.

Units of Soilbuild Business Space REIT finished flat from its previous trading day on the Singapore Exchange at SGD0.685.