Singapore-listed industrial landlord Sabana REIT has entered into an agreement to acquire 107 Eunos Avenue 3 for SGD34.5 million (USD24 million).

The six-storey light industrial building, which is being acquired in a sale-and-leaseback arrangement with General Cars Fleet Management Pte Ltd, features about 134,000 square feet of gross floor area, and has a remaining tenure of approximately 24 years.

“The proposed acquisition of the property on a long leaseback term is expected to benefit unitholders by improving asset and tenant diversification with the addition of a quality industrial building”, said the REIT in a statement.

Upon induction into Sabana REIT’s portfolio, General Cars fleet Management will rent approximately 34% of the property’s gross floor area for a term of five years, with an option to renew for three more.

Also provided for in the property acquisition agreement is a guaranteed net property income of approximately SGD3.1 million per annum.

Should this guaranteed income not be met, General Cars Fleet Management will pay to Sabana REIT a sum equal to the difference between the guaranteed and actual net property income.

The property’s acquisition is expected to be completed in the first half of 2017, said the industrial REIT, adding that it may fund the purchase with either equity, borrowings, or a combination of both.

The acquisition of 107 Eunos Avenue 3 represents Sabana REIT’s second acquisition in the Eunos industrial area within a week.

The REIT announced on 8 December that it was acquiring 72 Eunos Avenue 7 for SGD20 million, in what appears to a be a series of capital recycling efforts.

Units of Sabana REIT are currently trading about 1% lower from its previous close on the Singapore Exchange at SGD0.515.