ESR-Reit to divest industrial building for S$11.1 million

Nisha Ramchandani

Published Mon, Aug 30, 2021 · 08:51 PM

ESR-Reit has entered into an agreement to divest an industrial building, 45 Changi South Avenue 2, for S$11.1 million.

The price tag represents a 7.8 per cent premium to the property's fair value of S$10.3 million, said the Reit in a filing to the Singapore Exchange on Monday. The net proceeds will be used to repay outstanding borrowings, finance upcoming asset enhancements and/or fund general working capital requirements.

Adrian Chui, chief executive of the Reit's manager, said, "This divestment represents an opportunity for us to divest one of our non-core assets at a premium to book value."

He added: "The divestment will enable us to recycle capital for opportunities with higher returns, thus improving the quality of ESR-Reit's portfolio while optimising unitholders' returns. We will continue to actively review our portfolio to deliver greater income stability and identify opportunities for growth."

The four-storey general industrial building has a gross floor area of 73,684 square feet (sq ft).

Post-divestment, ESR-Reit's portfolio will consist of 57 properties across Singapore with a total gross floor area of approximately 15.6 million sq ft. The sale is subject to approval by JTC Corporation and is expected to be completed in 1Q 2022.