ESR-LOGOS REIT (E-LOG) is divesting 2 Jalan Kilang Barat for SGD35.3 million.
The divestment consideration represents a premium of 21.7% to its latest valuation, the REIT disclosed in a 29 September statement.
The asset is a nine-storey purpose-built industrial building with gross floor area of 7,679 square metres.
The property is approximately 19 years old and has a remaining land lease tenure of about 39.8 years, said ESR-LOGOS REIT.
“The divestment of [2 Jalan Kilang Barat] is in line with our strategy to continue unlocking value from E-LOG’s non-core properties”, said Adrian Chui, the REIT’s CEO.
"This provides us with greater financial flexibility to realise our growth aspirations, recalibrate E-LOG’s portfolio quality towards modern, in-demand and scalable assets, and optimise returns to our unitholders over the longer term”, he added.
The divestment, which is expected to settle in 4Q 2022, is not expected to have a material impact on E-LOG’s net asset value and distribution per unit for the financial year ending 31 December 2022, said the REIT.
Net proceeds from the divestment will be deployed to repay outstanding borrowings, finance upcoming asset enhancements, redevelopments, or fund general working capital requirements.
Upon completion of the divestment, E-LOG’s will have a portfolio of 80 assets across Singapore and Australia.
The REIT was last done on the Singapore Exchange at SGD0.355, which presently implies a distribution yield of 8.23% according to data on the Singapore REITs table.