ESR Reit to Divest Industrial Building for S$9.9 Million
The manager of ESR real estate investment trust (ESR Reit) has entered into a contract to divest an industrial building for about S$9.9 million.
Divestment Terms
The consideration represents a 1.5 per cent premium above its valuation of S$9.7 million, said the manager in a bourse filing on Wednesday (Jan 15).
Completion Timeline
The divestment is expected to be completed in the first quarter of 2025, and is not expected to have a material impact on ESR Reit’s net asset value and distribution per unit for the financial year ending Dec 31, 2025.
Property Details
The property, located at 79 Tuas South Street 5, is a general industrial building in the Tuas Industrial Estate, with a gross floor area of 6,312 square metres.
Use of Proceeds
The manager said: “Net proceeds from the divestment will be deployed to repay outstanding borrowings, finance potential acquisitions, asset enhancement initiatives and redevelopments and/or fund general working capital requirements.”
ESR Reit’s Portfolio
Upon completion of the divestment, the Reit’s portfolio will consist of 71 properties in Singapore, Japan and Australia, as well as investments in three property funds in Australia. This excludes the property at 48 Pandan Road, which is held through a joint venture.
Units of ESR Reit closed Wednesday up 2 per cent, or S$0.005, to S$0.26, before the announcement.
Conclusion
ESR Reit’s decision to divest an industrial building in the Tuas Industrial Estate for S$9.9 million is expected to have a positive impact on the company’s financials. The divestment will allow the Reit to repay outstanding borrowings, finance potential acquisitions, and fund other initiatives.
FAQs
Q: What is the consideration for the divestment of the industrial building?
A: The consideration represents a 1.5 per cent premium above the valuation of S$9.7 million.
Q: When is the divestment expected to be completed?
A: The divestment is expected to be completed in the first quarter of 2025.
Q: Will the divestment have a material impact on ESR Reit’s net asset value and distribution per unit?
A: No, the divestment is not expected to have a material impact on ESR Reit’s net asset value and distribution per unit for the financial year ending Dec 31, 2025.
Q: What will the Reit do with the net proceeds from the divestment?
A: The net proceeds will be deployed to repay outstanding borrowings, finance potential acquisitions, asset enhancement initiatives and redevelopments and/or fund general working capital requirements.
Q: What is ESR Reit’s current portfolio?
A: Upon completion of the divestment, the Reit’s portfolio will consist of 71 properties in Singapore, Japan and Australia, as well as investments in three property funds in Australia. This excludes the property at 48 Pandan Road, which is held through a joint venture.
