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Mapletree Industrial Trust to acquire industrial property at Tai Seng Drive
MAPLETREE Industrial Trust (MIT) is acquiring an industrial property at 7 Tai Seng Drive for S$68 million from Mapletree Logistics Trust (MLT), and will upgrade the property into a high-specification building.
An agreement to lease has also been inked with an "established information and communication technology company", it said in a press release on Friday. The property will be fully leased to the tenant for an initial term of 25 years, with annual rental escalations and an option to renew by the tenant for the remaining land lease tenure.
Manager Mapletree Industrial Trust Management said in the release that MIT had executed a novation agreement in respect of an option to purchase for the property (OTP) with its sponsor Mapletree Investments Pte Ltd and MLT. The OTP was originally granted to Mapletree Investments in August 2017.
The property has a gross floor area of 256,600 square feet and sits on a land area of about 96,500 sq ft. The site is zoned for Business 2 use with its land lease tenure of 30 years, commencing from March 1993 and an option to extend for another 30 years.
MIT said it would undertake upgrading works for the building, which is slated for completion in 2H2019. The total cost of the proposed acquisition and upgrading works is S$95 million.
Valuations of the building by Cushman & Wakefield and Savills Singapore totalled S$68 million and S$70 million respectively.
Assuming the S$95 million is fully funded by debt, MIT's aggregate leverage ratio is expected to increase from 33.1 per cent as at March 31, 2018 to 34.6 per cent.
Tham Kuo Wei, chief executive of the manager, said: "Upon completion of upgrading works, the addition of a new high-specification building will reinforce our strategy to grow the hi-tech buildings segment. The long-term lease commitment from a high-quality tenant will enhance the portfolio resilience."