ESR-Reit trustee to divest Bukit Batok property for S$23.9m

ESR-REIT announced on Tuesday that its trustee, RBC Investor Services Trust, has entered into an option to purchase with MSS Bukit Batok for the sale of 9 Bukit Batok Street 22 for S$23.9 million.

The sale consideration, excluding divestment costs and applicable goods and services tax, is 1.3 per cent above the property's current book value of S$23.6 million, ESR-Reit said, and is subject to approval by JTC Corporation. The transaction is expected to take place in the first half of 2018.

Proceeds from the sale, ESR-Reit said, will be used for debt repayment, potential acquisition opportunities, asset enhancement initiatives and general working capital.

The property is a five-storey warehouse industrial building with ancillary office and basement carpark, sited on a triangular land area of around 67,360 sq ft.

It has a gross floor area of some 157,860 sq ft with a remaining tenure of approximately 35 years.

According to ESR-Reit's statement, there is "limited redevelopment potential" for the site due to its small land area to increase gross floor area from its current plot ratio of 2.3 to the maximum of 2.5.

"This divestment is in line with the Trust's ongoing efforts to rejuvenate its portfolio by recycling capital released from the divestment of lower-yielding non-core assets to scalable and value-adding acquisitions which will benefit unitholders in the long term."