ESR-REIT is divesting 28 Senoko Drive for SGD12 million to the tenant occupying the asset.

The property was acquired in 2007 and its sale consideration represents an 8.4% discount to the fair value of the property, which was at SGD13.1 million.

ESR-REIT has described the general industrial asset as one that is dated with limited redevelopment and asset enhancement opportunities due to the short remaining land lease.

The divestment allows ESR-REIT to free up capital for growth and higher value opportunities, thus improving the quality of ESR-REIT’s portfolio while optimising unitholders’ returns”, said Adrian Chui, CEO of ESR-REIT’s manager.

The divestment is not expected to have a material impact on ESR-REIT’s net asset value and net property income for the financial year ending 31 December 2022, the REIT added.

Net proceeds from the divestment will be deployed to repay outstanding borrowings, fund upcoming asset enhancements, potential acquisitions, unit buy-back or general working capital requirements.

ESR-REIT was last done on the Singapore Exchange at SGD0.475, which presently implies a distribution yield of 6% according to data on the Singapore REITs table.

By Shariffa Al-Habshee

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