25 Changi South Street 1 (Google Maps)25 Changi South Street 1 (Google Maps)

Ascendas REIT is divesting 25 Changi South Street 1 for SGD20.3 million.
The two-storey warehouse is being sold to Hao Mart Pte Ltd.

The property has a gross floor area of 13,998 square metres.

It is approximately 19 years old, with remaining land lease tenure of about 37 years.

The proposed sale price is 14.0% higher than the original purchase price of SGD17.8 million.

It is also 2.0% higher than the market valuation of SGD19.9 million as at 31 December 2019.

The divestment is not expected to have any material effect on Ascendas REIT’s NAV and DPU for the FY ending 31 December 2020.

Assuming the proposed divestment was completed on 1 January 2019, the proforma impact on the REIT’s NPI and DPU for the FY ended 31 December 2019 would have been an increase of SGD0.2 million and 0.006 Singapore cents respectively.

Net proceeds after divestment costs are expected to be S$19.6 million.

The proceeds may be recycled to fund committed investments, repay existing indebtedness, extend loans to subsidiaries, or fund general corporate and working capital needs, or make distributions to unitholders.

If the net proceeds were used to repay Ascendas REIT’s borrowings as at 31 December 2019, its aggregate leverage will be reduced from 35.1% to approximately 35.0%.

The divestment is expected to complete within the first quarter of 2020.

Ascendas REIT would then own 96 properties in Singapore, 35 properties in Australia, 38 properties in the United Kingdom and 28 properties in the United States.

Ascendas REIT was last done on the Singapore Exchange at SGD3.24.

By Shariffa Al-Habshee

Shariffa joined REITsWeek in 2017, and monitors Asia-Pacific REITs for the publication.