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Cache Logistics Trust to divest from Shanghai chemical warehouse for 87m yuan
CACHE Logistics Trust is selling off a dangerous goods warehouse in Shanghai, the manager said on Friday.
It has inked an equity transfer agreement with Zhejiang Yongtai Logistics to sell Jinshan Chemical Warehouse for 87 million yuan (S$17.3 million), in a move that the manager said was in line with a portfolio rebalancing and growth strategy.
The price tag is about 12.5 per cent above the valuation carried out by Cushman & Wakefield, and about 22.5 per cent above the original purchase price of 71 million yuan, said the manager. Cache is expected to recognise a gain of 1.3 million yuan from the transaction, which should be completed by Dec 31.
"The divestment provides Cache with the opportunity to recycle its capital in line with the manager's portfolio rebalancing and growth strategy to create debt headroom and reinvest capital into higher-performing assets with stronger property fundamentals," the manager said, noting that strategic divestments over the past three years have freed up capital for diversification and expansion in Australia.
The manager added the property has limited redevelopment potential because of safety regulations governing its design and layout. Jinshan Chemical Warehouse, in the Shanghai Chemical Industry Park, has about 38 years left on its land use rights, and a gross floor area of 13,546.6 square metres (145,810 square feet) spread over four single-storey buildings.
The deal is not expected to have a material impact on Cache's net asset value and net property income for the 2018 financial year, the manager added.
Cache closed flat at S$0.705 before the announcement.