Business Times: Tue, Nov 29
SABANA Shari'ah Compliant Industrial Real Estate Investment Trust (Sabana Reit) is set to acquire a three-storey industrial property located at Woodlands for a purchase consideration of $14.8 million, to be funded by debt.
Easily accessible by Bukit Timah Expressway (BKE) and close to the Admiralty and Sembawang MRT stations, the JTC leasehold property located at located at 6 Woodlands Loop has a total gross floor area (GFA) of 77,544 square feet (sq ft) and a remaining tenure of about 43 years.
HSBC Institutional Trust Services (Singapore) Limited - in its capacity as the Reit's trustee - has on Nov 25 entered into a sale and purchase agreement (SPA) with Winstant & Co Pte Ltd (Winstant & Co) for the general industrial building.
Upon completion of the acquisition, Sabana Reit will enter into a three-year lease agreement with MMI Holdings Limited, the existing tenant of the property.
Under the SPA, the vendor has agreed to provide rental income support, subject to a maximum of $958,058, for a period of three years from the acquisition completion date.
The manager of the Reit, Sabana Real Estate Investment Management Pte Ltd, believes the proposed transaction to be beneficial to Sabana Reit's unit-holders, saying also that it is in line with with its strategy to invest in 'income-producing real estate and real-estate related assets used for industrial purposes in Asia' that provide strong cash flows and are yield-accretive.
The manager also said that the acquisition will raise the Reit's weighted lease tenure as well as lower its lease expiry concentration in 2013 and 2015.
Factoring in the post-acquisition impact of the Woodlands industrial building along with recently completed purchases comprising properties based in Joo Koon and Toh Tuck, the Reit's aggregate leverage stands at about 32.2 per cent. If including 39 Ubi Road 1 - a proposed acquisition that is pending legal completion - the aggregate leverage is expected to increase to 34.2 per cent.
The counter closed trading unchanged at 87 cents yesterday.
Source: Business Times © Singapore Press Holdings Ltd.
Martin Koh/ Sherry Tang