CapitaLand Ascendas REIT divests local industrial building at 219% premium from 2005 purchase price

sidebrewing 

CLAR has a market capitalisation of $4.46 billion as at 12.20pm on April 20.

CLAR’s Manager has announced the divestment of Singapore industrial building KA Place for a consideration of $35.38 million. The proposed divestment is part of an active asset management strategy to improve the quality of CLAR’s portfolio and optimise returns for unitholders.

According to an April 20 filing, the REIT’s trustee, HSBC Institutional Trust Services (Singapore), has entered into a sale and purchase agreement to sell KA Place to KA Place SPV 1. This is a 219% premium to CLAR’s original purchase price of $11.1 million back in March 2005, and a 55% premium to the property’s Dec 31, 2022 market valuation of $22.8 million.

KA Place is a seven-storey high-specification industrial building located at 159 Kampong Ampat. The edifice includes a carpark on the second storey and has a total gross floor area of 10,163 sq m, with a remaining land lease tenure of about 35 years.

Net proceeds after divestment costs are expected to be $30.65 million. The manager says the net proceeds may be used to fund committed investments, repay existing indebtedness, make distributions to unitholders, or extend loans to subsidiaries.

Assuming the proposed divestment was completed on Jan 1, 2022, the pro-forma impact on CLAR’s net property income (NPI) and distribution per unit (DPU) for the financial year ended Dec 31, 2022 would have been a decrease of $0.92 million and 0.005 Singapore cents, respectively.

Using the net proceeds to repay CLAR’s borrowings as at Dec 31, 2022, the aggregate leverage will be reduced from 36.3% to approximately 36.2%. The proposed divestment is expected to complete within 2Q2023.

In accordance with the trust deed dated Oct 9, 2002 constituting CLAR, the manager is entitled to a divestment fee of 0.5% of the sale consideration of the property, which would be paid in cash.

Units in CapitaLand Ascendas REIT closed 3 cents higher, or 1.05% up, at $2.88 on April 20. CLAR has a market capitalisation of $4.46 billion as at 12.20pm on April 20.

The proposed divestment of KA Place is part of the manager’s asset management strategy to optimize returns for unitholders and provide better quality in CLAR’s portfolio. This divestment will enable the REIT to reinvest the net proceeds into value-adding opportunities.

The consideration sum represents a 219% premium to CLAR’s purchase price of $11.1 million in March 2005, and a 55% premium to the property’s Dec 31, 2022 market valuation of $22.8 million. The net proceeds after divestment costs are estimated to be $30.65 million, making it a great deal for the REIT.

Moreover, if the net proceeds were used to repay CLAR’s borrowings as at Dec 31, 2022, CLAR’s overall leverage will further decrease from 36.3% to approximately 36.2% – translating to improved financial health.

Units in CapitaLand Ascendas REIT closed 3 cents higher, or 1.05% up, at $2.88 on April 20. Market capitalisation recorded a total of $4.46 billion as at 12.20pm on April 20.

In accordance with the trust deed, the manager will receive a divestment fee of 0.5% of the sale consideration of the property.

Upon completion of the divestment, which is expected to take place within 2Q2023, CLAR will own 229 properties, comprising 96 properties in Singapore, 36 properties in Australia, 48 properties in the United States and 49 properties in the United Kingdom and Europe.

Recommended Posts

Uncategorized

The Tengah Plantation Close EC: Close to PIE, AYE, KJE & BKE for Quick Access Around Singapore

It is also close diverse amenities such as schools, shopping malls and entertainment options. Residents who lives near Tengah Plantation Close EC would definitely benefit from its location. With its accessibility to expressways, it offers an easy way to get around Singapore. It is also surrounded by quality educational institutions, shopping malls and entertainment centers, […]

sidebrewing 
Uncategorized

Explore Jurong Point Shopping Mall – Shop, Dine and Have Fun with Banks, Beauty Salons & Health and Wellness Centre

Jurong Point is the perfect spot to relax and dine with family and friends. With a diverse selection of food outlets offering a variety of cuisines, there is something to satisfy everyone’s tastebuds. Furthermore, for those who prefer to stay indoors, Plantation Close EC offers a variety of services such as banks, beauty salons and […]

sidebrewing 
Job Opportunities Abound in Tampines Ave 11 Condo Master Plan Identifies Tampines Regional Centre and Changi Business Park as Key Examples
Uncategorized

Job Opportunities Abound in Tampines Ave 11 Condo Master Plan Identifies Tampines Regional Centre and Changi Business Park as Key Examples

The availability of such amenities is indeed a tremendous boon for families that seek to be situated near popular places of employment. In addition, potential Tampines Avenue 11 condo residents can also take advantage of the MRT line that passes through the area for easier transport to other parts of the city. The Master Plan […]

sidebrewing 
The Myst Eco-Friendly Features Near to Bukit Panjang Bus Interchange and Bukit Panjang Downtown MRT Station
Mortgage Property News Real Estate

The Myst Eco-Friendly Features Near to Bukit Panjang Bus Interchange and Bukit Panjang Downtown MRT Station

The Myst has a wealth of landscaping features that emphasize the importance of sustainability. Residents can enjoy the sense of peace and tranquility found in a rooftop garden surrounded by lush vegetation. Furthermore, rainwater harvesting systems have also been installed to help reduce water consumption and conserve natural resources. By combining these amenities, The Myst […]

sidebrewing