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

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.

Units in the Reit closed at 47.5 Singapore cents on Monday, up one cent or 2.15 per cent.