Soilbuild Business Space REIT (Soilbuild REIT) announced on 21 September that it has entered into a loan agreement with the Bank of East Asia (BEA) for SGD45 million (USD33 million).

The loan comprises of a SGD40 million term loan facility, and a SGD5 million revolving credit facility.

The loan has a term of three years and bears an interest rate equal to a margin over the three-month SGD swap offer rate (SOR).

At the SOR as of 21 September, the effective interest rate is lower than its existing weighted average borrowing costs, said Soilbuild REIT in a statement announcing the loan agreement.

“We are glad to have BEA’s support in providing us a competitive unsecured facility which has enabled Soilbuild REIT to progress towards its goal of achieving financial flexibility while keeping its borrowing cost low”, said Mr Roy Teo, CEO of the REIT’s manager.

The Singapore-listed industrial REIT added that its secured leverage will reduce once acquisition of Bukit Batok Connection, which will be partially financed by the SGD40 million unsecured term loan facility, is completed.

Soilbuild REIT first announced in June 2016 that it was acquiring the nine-storey industrial property for about SGD96.3 million.

Besides taking on the loan facilities with BEA, Soilbuild REIT has also launched a preferential offering exercise to raise some SGD59.4 million by issuing 94 million new units in the REIT to fund the acquisition.

Units of Soilbuild REIT finished the trading day about 0.7% lower from its previous close on the Singapore Exchange to end at SGD0.675.