SINGAPORE (EDGEPROP) - ESR-REIT has announced the proposed divestment of eight non-core industrial properties in Singapore for a total consideration of $338.1 million, representing a 2% premium to their independent valuation as at Nov 30. The sale, to third-party purchasers managed by Brookfield Asset Management affiliates, is part of ESR-REIT's ongoing strategy to rejuvenate its portfolio and recycle capital into new, value-accretive opportunities.

The assets being sold include logistics buildings at 46A Tanjong Penjuru and 24 Jurong Port Road that have sale considerations of $113.5 million and $68 million; general industrial buildings at 86 & 88 International Road, 120 Pioneer Road, 13 Jalan Terusan, 50 Tuas South Street 1 and 43 Tuas Circuit View with sale considerations of $42.2 million, $34.1 million, $16.7 million, $3.5 million and $15.1 million respectively; and a high-specifications industrial facility at 21 & 23 Ubi Road 1 being sold for $45 million.

The divestment will improve the ESR-REIT's portfolio weighted average remaining land lease from 43.3 to 44.8 years, and increase weighted average lease expiry from 4.1 to 4.3 years, on a pro forma basis as at Sept 30.

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Assuming the proposed divestment was completed on Jan 1, 2024, it would result in a 4.1% drop in ESR-REIT's pro forma distribution per unit for FY2024, going from 21.19 Singapore cents to 20.323 cents. Net asset value per unit will remain unchanged at $2.75. Pro forma aggregate leverage as at Dec 31, 2024, is expected to decrease from 42.8% to 39.2%, expanding debt headroom to approximately $1.114 billion and enhancing financial flexibility for future investments.

Adrian Chui, CEO and executive director of ESR-REIT's manager, commented, "The proposed divestment represents a disciplined and strategic step in our ongoing portfolio rejuvenation and capital recycling efforts. By realising value from non-core assets, we continue to reduce the impact of land lease decay in our net asset value."

The transaction does not require unitholders' approval as it falls within the ordinary course of business under SGX listing rules.