CAPITALAND Ascendas Real Estate Investment Trust : A17U 0% (Reit) has agreed to sell three of its logistics properties in Queensland, Australia for S$64.2 million in total.

The sale consideration represents a premium of 6.2 per cent over the total market valuation of the properties – 77 Logistics Place, 62 Sandstone Place and 92 Sandstone Place – which stood at S$60.4 million as at Aug 31.

The three properties were purchased in 2015 between October and November.

On a pro forma basis, if the proposed divestment had been completed on Jan 1, 2022, the Reit’s net property income for the financial year ended Dec 31, 2022, would have decreased by S$3.9 million; its distribution per unit for the year would have fallen by S$0.04.

But the sale amount is not expected to have any material impact on CapitaLand Ascendas Reit’s net asset value and distribution per unit for the financial year ending Dec 31, 2023, the Reit’s manager said on Wednesday (Dec 20).

The Reit’s net proceeds after deducting divestment costs are expected to be S$60.8 million. The manager noted that it is entitled to a divestment fee of 0.5 per cent of the sale consideration, which will be paid in cash, according to a trust deed dated Oct 9, 2002.

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The manager said the proposed divestment, which is expected to be completed within the first quarter of 2024, aligns with its “proactive asset management strategy to improve the quality of (the Reit’s) portfolio and optimise returns for unitholders”.

The proceeds may thus be used to finance committed investments, repay existing indebtedness, extend loans to subsidiaries, fund general corporate and working capital needs, and/or make distributions to unitholders, it added.

Demonstrating the possible impact on aggregate leverage, the manager noted that if the net proceeds from the sale were used to repay the Reit’s borrowings as at Dec 31, 2022, it would have led to a decrease in aggregate leverage to 36.1 per cent, from 36.3 per cent.

With the divestment, the Reit will own 228 properties – 97 in Singapore, 33 in Australia, 48 in the US, and 50 in the UK or Europe. 

Units of CapitaLand Ascendas Reit closed down 0.3 per cent or S$0.01 at S$2.92, before the news.