ARA Logos Logistics Trust to divest Upper Changi property for S$16.7m

THE manager of ARA Logos Logistics Trust (ARA Logos) has on Thursday entered into an agreement with PGI Holdings to divest ALOG Changi DistriCentre 2 for S$16.7 million.

The proposed sale consideration is approximately 7.7 per cent above CBRE's valuation of S$15.5 million as at Dec 31, 2020, the manager said in a bourse filing after trading hours.

Sale proceeds will go towards improving financial flexibility and building a more resilient and quality portfolio, the manager said.

After taking into account the associated taxes and divestment related expenses, net proceeds from the sale would be about S$16.3 million. ARA Logos is expected to recognise an estimated divestment gain of approximately S$800,000 over the latest book value, as at end-December 2020.

The property comprises a three-storey cargo lift warehouse, with an adjoining four-storey office block. It has a total land area of 65,767 sq ft, with a gross floor area of 111,359 sq ft.

Located along Changi South Street 3, it was completed in 1998 and was part of ARA Logo's initial public offering portfolio.

The proposed divestment is subject to JTC's approval, and is expected to complete in the second quarter. It is not expected to have a material impact on ARA Logo's net asset value and net property income for the financial year 2021.

Karen Lee, chief executive of the manager, said: "This proposed divestment of ALOG Changi DistriCentre 2 will allow (ARA Logos) to unlock and redeploy capital into other higher-performing assets and achieve operational efficiencies."

Units of ARA Logos Trust ended Thursday 0.68 per cent or 0.5 Singapore cent higher at 74.5 Singapore cents.