AIMS APAC REIT to acquire Sime Darby Business Centre on Alexandra Road for $102 million
By Timothy Tay
/ EdgeProp Singapore |
SINGAPORE (EDGEPROP) - AIMS Apac REIT (AA REIT) has entered into a put-and-call option agreement to acquire the Sime Darby Business Centre at 315 Alexandra Road, says the REIT manager, AIMS Apac REIT Management. The purchase from Aster (Alexandra) amounts to $102 million.
Sime Darby Business Centre is anchored by Sime Darby Property Singapore, a wholly owned unit of Sime Darby Property, and will be acquired at an initial net property income yield of 6.2%.
According to the REIT manager, the property will be acquired on a partial leaseback basis. Sime Darby Property Singapore will lease back 70% of the property’s total gross floor area for 10 years with fixed annual rental escalation and a four-year lease renewal option at the prevailing market rate.
“The proposed acquisition marks a first for AA REIT in acquiring a light industrial asset in the city-fringe area, where such assets are tightly held amongst owners and investors. This will be a strategic fit for AA REIT, adding a centrally-located and highly coveted light industrial building to the portfolio,” says Koh Wee Lih, CEO of AIMS Apac REIT Management.
The manager adds that the total cost of the acquisition of Sime Darby Business Centre is expected to come up to about $106.6 million, comprising the purchase consideration and transaction costs of about $4.6 million. (Picture: CBRE)
Sime Darby Business Centre is a light industrial facility that sits on an 83,097 sq ft plot. The site is zoned “Business 1” under the 2020 Master Plan and has a remaining land tenure of more than 34 years, as of Dec 31, 2020.
The property comprises a main five-storey building and a three-storey annex building at the rear. A recently completed refurbishment programme included upgrades to the entry foyer, drop-off canopy, common lift lobbies, walkways and toilets on each floor.
The entire property has a total gross floor area of 179,186 sq ft. It features space for a ground-floor showroom, vehicle servicing stations on the first and second floors, as well as business space use on the rest of the floors.
The manager says the purchase consideration is in line with an independent valuation of the property by Savills Valuation and Professional Services, which valued the property at $104.7 million as at Jan 26 this year.
The manager adds that the total cost of the acquisition is expected to come up to about $106.6 million, comprising the purchase consideration and transaction costs of about $4.6 million.
On the completion of the acquisition, AA REIT will have a total of 29 properties in its portfolio. This will comprise 27 buildings in Singapore and two properties in Australia - a property in Gold Coast, Queensland, and a 49% interest in a property in Macquaire Park, New South Wales.
“Well-located ‘Business 1’ buildings, such as 315 Alexandra Road, have been prime beneficiaries of improving downstream activities resulting from strong performances in the key manufacturing pillars of electronics, biomedical manufacturing and precision engineering,” says Rimon Ambarchi, head of industrial & logistics, Singapore and Southeast Asia of CBRE, which brokered the sale.
He adds that the transaction highlights investors’ continued confidence in Singapore’s industrial sector.
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