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Metro Holdings unit acquires 26% stake in portfolio of 14 industrial, logistics properties for up to S$76.6m
PROPERTY group Metro Holdings is expanding its Singapore footprint through the acquisition of a 26 per cent stake in a portfolio of 14 properties for up to S$76.6 million.
The portfolio comprises six industrial properties, one business park, four high-spec industrial properties and three logistics properties. They are located in various parts of Singapore and within proximity to transportation nodes, the group said on Thursday.
The portfolio has a total net lettable area of 1,748,105 square feet, and a committed average occupancy rate of 99 per cent. The weighted average lease expiry of the properties stands at approximately 7.7 years.
Metro, through its indirect wholly-owned subsidiary Metrobilt Construction Pte Ltd, entered into subscription agreements to initially subscribe for 26 per cent of the units as well as the 7 per cent notes that are due in 2031 to be issued by Perpetual (Asia) Limited in its capacity as trustee of Boustead Industrial Fund (BIF).
Twenty-five per cent of the units and notes in BIF will be held by Boustead Projects Limited, and the remaining 49 per cent will be held by a special purpose vehicle for institutional real estate investors.
Metro said the investment consideration through the subscription of units will amount to as much as S$15.2 million, while the subscription of the notes is slated to set the group back by a maximum of S$61.4 million.
Upon the fulfilment of conditions under the various transaction documents, the investment will result in BIF becoming an associate of the Metro Group.
The investment consideration was arrived at on a willing buyer willing seller basis after taking into account the expected net income to be derived from the portfolio, and will be funded by a combination of internal cash resources and external borrowings.
Metro said this investment marks its foray into Singapore's "highly sought-after" industrial real estate market, and will deepen the company's presence in the local market and further diversify from its existing investment portfolio.
"The outlook of the overall industrial real estate market in Singapore remains positive as the country will continue to be a favourable destination as a hub for companies worldwide and the industrial sector is poised for sustainable growth in the long term," said the group.
Said Metro chief executive officer Yip Hoong Mun: "We see several positive attributes for this quality portfolio, which is well diversified within key industrial, business park and logistics segments.
"The investment represents an excellent proposition for Metro to establish a strategic presence in the Singapore industrial real estate market with an immediate scale of 14 quality assets to generate stable and recurring income."
Shares of Metro closed flat at 71.5 Singapore cents on Thursday.