ESR-Reit secures railway firm as tenant at Tuas industrial property

Singapore

ESR-REIT has secured a new lease for about 168,846 square feet (sq ft) at its 8 Tuas South Lane property with Singapore railway firm P-Way Construction and Engineering, the industrial Reit's (real estate investment trust) manager said in a bourse filing on Thursday.

That accounts for about one-fifth of the 768,201 sq ft of lettable area at the property. ESR-Reit did not disclose the lease terms including the duration and rent amount.

P-Way will use the space to supply steel fabrication works, store railway equipment and parts, and provide dormitory services for its employees.

The company specialises in railway construction, installation and maintenance, and is contracted by Singapore's Land Transport Authority to provide track work services.

P-Way will house its operations related to the upcoming Jurong Region MRT Line and the extension of Changi Airport Terminal to the train depot at the Tuas property. The firm will start these operations from Oct 1.

8 Tuas South Lane is a general industrial property in the west of Singapore, positioned in the heart of the city-state's largest manufacturing hub. It also sits at the gateway to the upcoming container terminal Tuas Megaport; the first phase of the port is scheduled to complete in 2021.

One of the property's current tenants is Hyflux Membrane Manufacturing (S), a subsidiary of beleaguered water treatment firm Hyflux.

Hyflux Membrane now accounts for 3.1 per cent of ESR-Reit's total rental income, down from 3.6 per cent as at June 30, the Reit manager said on Thursday.

"This is part of the manager's proactive asset management to diversify the tenant concentration risks and improve tenant mix and quality," it added.

The manager said the Tuas property continues to receive strong leasing interest and enquiries due to its proximity to the future Tuas Megaport.

Units of ESR-Reit closed at S$0.52 on Thursday, up one cent or 1.96 per cent.