AA Reit renews master leases with Japanese logistics group KWE, Cargill’s Aalst Chocolate

AIMS Apac Reit (AA Reit) has renewed the master lease with Japanese logistics group Kintetsu World Express (KWE) for a new five year term, and extended the master lease term with Cargill’s chocolate manufacturer Aalst Chocolate for a further 10 years.

As at the end of September 2023, the two master leases contributed about 6.6 per cent to the gross rent of the Reit’s total portfolio, said its manager on Monday (Jan 8).

The two renewals will extend AA Reit’s portfolio weighted average lease expiry to 4.6 years from 4.2 years by gross rental income.

The manager noted both leases were signed at a positive rental reversion over their expiring rental rate and subject to rental escalations.

KWE, one of the Reit’s top ten tenants, has renewed the lease of the property to Dec 31, 2028. AA Reit will also carry out exterior building improvement works at the property, which spans a gross floor area of 68,190 square metres (sqm) at Jurong Innovation District.

The lease with Aalst Chocolate has been extended to April 18, 2035. Located within Jurong Industrial Estate, the property comprises a two-story industrial building with a leasable area of 5,858 sqm. The chocolate manufacturer and its parent company Cargill have been long-standing tenants since Apr 19, 2007, the Reit manager said.

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“To support Aalst Chocolate’s business requirements, AA Reit will carry out electrical upgrading works,” the manager added.

Russell Ng, chief executive officer of the Reit manager, highlighted “the sustained demand” from the industry as a testament to the Reit’s strong tenant relationships.

The counter closed up 0.8 per cent, or S$0.01, at S$1.33 on Friday.