AIMS AMP Capital Industrial REIT's inaugural third-party greenfield build-to-suit (BTS) development. (Photo: AIMS AMP Capital Industrial REIT)

AIMS AMP Capital Industrial REIT is developing its inaugural third-party greenfield build-to-suit (BTS) development facility on a 8,600 square metre plot of land at the junction of Marsiling Road and Marsiling Lane.

The five-storey production facility will cost approximately SGD39.4 million including land and associated costs, said the Singapore-listed industrial REIT in a statement on 4 August.

Upon completion, the property will be leased to Singapore-based precision parts manufacturer Beyonics International Pte Ltd on a ten-year master lease term with annual rent escalations.

The property is estimated to provide SGD3.5 million in rental income in the first year.

Koh Wee Lih, CEO of the REIT’s manager, described the development as being in line with the REIT’s strategy of seeking risk-adjusted yield accretive investments.

“The development further underscores our focus on building long-term relationships with high-quality tenants by offering customised solutions”, he added.

According to AIMS AMP Capital Industrial REIT, it has sufficient funding capacity for the development. Taking into account ongoing redevelopments at 30 & 32 Tuas West Road and 8 & 10 Tuas Avenue 20, the REIT’s gearing is expected to remain at 36.0%, it said.

The development will impact distribution per unit (DPU) by 0.30 cents, and the yield on cost of this development is estimated to be around 8.9 per cent, the REIT added. The development is expected to complete in the second half of 2017.

Units of AIMS AMP Capital Industrial REIT last changed hands on the Singapore Exchange at SGD1.44.

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.