Viva Industrial Trust has completed the acquisition of a newly built five-storey ramp-up logistics property at 6 Chin Bee Avenue, Singapore.

The trust first announced in October 2016 that it was acquiring the property for SGD87.3 million (USD62 million).

The building, which caters mainly to the food services sector, was acquired from and leased back to multi-enterprise Sharikat National under a seven-year triple net lease agreement for SGD7.44 million a year, with provisions for rental escalations of 1.5% per annum from the third year onwards.

“We see the immense potential of Singapore’s growing food services sector and this asset serves as a cornerstone of [Viva Industrial Trust’s] strategy to tap on the increasing demand for centralised food storage facilities”, said Wilson Ang, CEO of the trust’s manager.

“The acquisition of this defensive asset is yield-accretive, broadens [Viva Industrial Trust’s] portfolio mix and reinforces its strong fundamentals at a time when the market continues to face headwinds and uncertainties”, he added, in a statement on the acquisition.

The purchase has been funded by a mix of debt, proceeds from a private placement of new stapled securities completed in November 2016, and the issuance of new consideration stapled securities to Sharikat National to satisfy SGD23.0 million of the purchase consideration.

With the acquisition, Viva Industrial Trust’s portfolio value has now grown by 7.9% to approximately SGD1.28 billion across eight properties, with a weighted average portfolio occupancy of 89.8%, up from 88.6% previously.

In addition to this, the trust’s weighted average lease expiry (WALE) by net rental income has also increased from 3.3 years to 3.6 years.

Units of Viva Industrial Trust finished the trading day unchanged from its previous close on the Singapore Exchange to end at SGD0.76.