AIMS AMP Capital Industrial REIT (AA Reit) on Friday said it will invest some S$41.7 million to redevelop its two three-storey detached industrial buildings on 30 and 32 Tuas West Road into a five-storey ramp-up warehouse facility.
Upon completion, the asset is expected to be valued at S$60.7 million, over four times its current value of S$14.1 million.
The redevelopment will also nearly double the gross floor area to about 287,866 square feet from 159,717 square feet, and increase the plot ratio from 1.15 to 2.07.
The redevelopment will commence in Q3 FY2016 and is targeted for completion in Q1 FY2018.
Following its completion, mainboard-listed logistics group CWT Limited will have staggered master leases on the warehouse with lease terms varying between 32 months to four years and two months for the different floors and with an annual rent escalation.
Design and construction of the ramp-up warehouse will be performed by Indeco Engineers, a wholly owned subsidiary of CWT Limited.
According to AA Reit's statement, annual rental income will increase to S$4.15 million (upon completion) from S$0.82 million, with the net yield on cost of this redevelopment estimated to be around 7.2 per cent.
"Property income is expected to be reflected in the Q2 FY2018 quarter," said AA Reit.