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Ascendas Reit divests 19-year-old Old Toh Tuck Road building for S$24m

ASCENDAS Reit announced that it has on Tuesday entered into a sale and purchase agreement to sell 30 Old Toh Tuck Road to interior design company Soon Bee Huat Trading for S$24 million.

The five-storey ramp-up logistics building, at 19 years old, has 39 years remaining on its land lease tenure and has a gross floor area of 16,353 square metres and had occupancy of 86.1 per cent as at Dec 31, 2017.

The selling price is 22.4 per cent higher than the S$19.6 million original purchase price, Ascendas said, and is at an 18.2 per cent premium over the S$20.3 million valuation of the property as at Mar 31.

Ascendas Reit expects the proposed divestment, which has been approved by JTC Corporation, to be completed within the second quarter of 2018, after which it will then own 99 Singapore and 31 Australian properties.

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The divestment, the Reit said, is in line with manager Ascendas Funds Management's "proactive asset management" strategy to improve Ascendas Reit's portfolio and optimise shareholders' returns.

Net proceeds, expected to be S$22.9 million after deducting divestment costs, could potentially go towards funding investments, repaying existing debts, loaned to subsidiaries or put towards general corporate and working capital needs, the Reit said.

In accordance with Ascendas Reit's trust deed, manager Ascendas Funds Management is entitled to 0.5 per cent of the property's sale price as divestment fees - working out to S$120,000 - to be satisfied in cash.

Ascendas added that if proceeds were used to repay its borrowings as at Dec 31, 2017, its leverage will be cut to 35 per cent from the current 35.2 per cent.