Ascendas Reit to divest three properties in Australia for S$128.7m

ASCENDAS real estate investment trust (Reit) will divest three logistics properties in Australia for a total of A$125.1 million (S$128.7 million).

The sale price is around 16.8 per cent higher than the total market valuations of the properties of A$107.1 million as at Dec 31, 2020. The divestments are expected to be completed by Q3 this year, said the Reit's manager in a statement on Thursday.

Ascendas had entered into two separate agreements with unrelated purchasers for the sale of two logistics properties (82 Noosa Street and 62 Stradbroke Street) in Brisbane; and one logistics property (1314 Ferntree Gully Road) in Melbourne.

Assuming the divestments were completed on Jan 1, 2020, the annualised proforma impact on Ascendas Reit’s net property income would have been a decrease of S$5.1 million; and distribution per unit would have fallen by 0.075 Singapore cents for the financial year ended Dec 31, 2020.

Net proceeds after divestment costs are expected to be S$124.0 million. The proceeds may be recycled to fund committed investments, repay existing indebtedness, extend loans to subsidiaries, fund general corporate and working capital needs and/or make distributions to unitholders, said the Reit's manager. 

If the net proceeds were used to repay Ascendas Reit’s borrowings as at March 31 this year, its aggregate leverage will be reduced from 38 per cent to around 37.5 per cent.

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The manager is entitled to a divestment fee of 0.5 per cent of the total sale price of the properties, which would be paid in cash. Post-divestment, Ascendas Reit will own 95 properties in Singapore, 34 properties in Australia, 30 properties in the US and 49 properties in the UK/Europe.

The manager said the proposed divestments are in line with its "proactive" asset management strategy to improve the quality of the Australian portfolio and optimise returns for unitholders.

Units of Ascendas Reit closed up S$0.01 or 0.3 per cent higher at S$2.92 on Thursday.