ESR-REIT to acquire 8 Tuas South Lane for SGD95 million

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ESR-REIT has entered into an agreement to acquire 8 Tuas South Lane for SGD95.0 million.

The property, which is currently occupied by water technology firm Hyflux, consists of five detached factories, an eight-storey warehouse, and four blocks of dormitory buildings.

The acquisition consideration represents a discount of about 17% from the appraised value of the property, which has been given as SGD115.0 million.

This is based on a valuation conducted by Edmund Tie & Company (SEA) Pte Ltd as at 10 October 2017 using the capitalisation approach and discounted cash flow analysis, inclusive of upfront land premium payable for the unexpired lease term of approximately 35.4 years.

Estimated cost of the acquisition, including transaction costs and stamp duties, is expected to reach approximately SGD111.0 million.

“This acquisition marks the inaugural transaction for ESR-REIT since ESR became the majority shareholder of its manager in January 2017”, said Adrian Chui, CEO of the REIT’s manager, in a statement issued on 18 October.

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Ridzwan Rahmat has been analysing Singapore-listed REITs and business trusts, since 2008. For disclosure purposes, Ridzwan is currently vested in Mapletree Greater China Commercial Trust, Mapletree Industrial REIT and Mapletree Logistics Trust.

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