ESR-REIT is redeveloping its property at 21B Senoko Loop into a build-to-suit high-specifications facility for NTS Components Singapore Pte Ltd.

The estimated cost of the redevelopment is approximately SGD38.5 million and it is expected to be completed by 1Q 2024.

21B Senoko Loop is presently a seven-storey general industrial property cum dormitory block and a 4-storey warehouse block with a combined gross floor area of 195,823 square feet.

“The redevelopment will increase the proportion of resilient new economy assets in our portfolio, enabling us to continue delivering long-term sustainable value to our unitholders”, said Adrian Chui, CEO of the REIT’s manager, in a statement on the project.

NTS is a wholly-owned subsidiary of NTS Group Asia and it specialises in complex mechatronics assemblies and manufacturing of high-accuracy frames and sheet metal.

The redevelopment will be executed in two phases, with the first phase is expected to be completed in the first half of 2023 with phase two to follow about ten months after.

Under the terms of the redevelopment, the asset will be leased to NTS on a triple net lease basis for 15 years with annual rental escalations.

NTS will be fully responsible for the payment of utilities, maintenance expenses, property tax and land rent.

Upon completion of the redevelopment, ESR-REIT’s portfolio will include nine high-specifications assets, representing 18.4% of its portfolio valuation.

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ESR-REIT was last done on the Singapore Exchange at SGD0.415, which presently implies a distribution yield of 7.2% according to data on the Singapore REITs table.