AIMS APAC REIT (AA REIT) is divesting 541 Yishun Industrial Park A for SGD12.88 million.

The asset is a four-storey factory building that has been described by the REIT as having “limited redevelopment potential”.

It has a remaining land lease tenure of about 31 years as at 31 March 2023.

The sale price represents an 8.2% premium to the asset’s valuation of SGD11.9 million as at 31 March 2023.

“This divestment is part of our proactive asset management strategy to optimise and rejuvenate AA REIT’s portfolio”, said Russel Ng, CEO of the REIT’s manager.

“Amid the current macroeconomic uncertainties, we remain focused on various organic growth initiatives, which cumulatively, will continue to underpin our strong operating performance and long-term income resilience of AA REIT”, Ng added.

Net proceeds from the divestment will be utilised to repay debt initially and may be recycled to asset enhancement initiatives, redevelopment opportunities and selective acquisitions, said the REIT.

Subject to JTC’s approval, the divestment is targeted to be completed by the third quarter of 2023.

Following the divestment, the REIT’s portfolio will comprise 28 assets across Singapore and Australia.

AIMS APAC REIT was last done on the Singapore Exchange at SGD1.38, which presently implies a distribution yield of 7.51% according to data on the Singapore REITs table.

Related: Singapore industrial REITs lose institutional funds as production declines

By Shariffa Al-Habshee

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