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26-06-2014, 11:55 AM
A-reit sees net income yield from Hyflux Innovation Centre
THE purchase of Hyflux Innovation Centre and the leaseback arrangement with Hyflux Limited is expected to generate a net property income yield of about 6.98 per cent, post acquisition costs, in the first year, Ascendas Real Estate Investment Trust (A-reit) said.
Here is the statement from A-reit:
Ascendas Funds Management(S) Limited, the manager of Ascendas Real Estate Investment Trust ("A-REIT") (the "Manager" of A-REIT), is pleased to a nnounce the proposed acquisition of Hyflux Innovation Centre located at 80 Bendemeer Road (the "Property") (the "Acquisition"), for a total purchase consideration of S$191.2 million (the " Purchase Consideration").
Mr Tan Ser Ping, Executive Director and Chief Executive Officer of the Manager said, "We are pleased to strengthen our relationship with Hyflux Ltd, with a sale-and-leaseback arrangement at Hyflux Innovation Centre.
This property is a prime high-specifications development located at the fringe of the central business district.
Hyflux's commitment to lease 50 per cent of gross floor area for 15 years will extend A-REIT's weighted lease expiry profile to 3.96 years."
Details of the Acquisition
HSBC Institutional Trust Services (Singapore) Limited (as trustee of A-REIT) has entered into a conditional sale and purchase agreement (the "Sale and Purchase Agreement") with Hyflux Innovation Centre Pte Ltd (the "Vendor") on 25 June 2014 to acquire Hyflux Innovation Centre for S$1 70.0 million. In addition, an upfront land premium of S$21.2 million for the remaining land lease of the first 30 years term will be payable to Jurong Town Corporation ("JTC") upon the assignment of the land lease to A-REIT.
A-REIT is expected to incur transaction costs of about S$2.66million, which include S$1.7 million in acquisition fees payable to the Manager (being 1 per cent of the consideration payable to the Vendor). The Acquisition is expected to complete on 30 June 2014.
Upon completion of the Acquisition, the Vendor and Hydroch em Pte Ltd will collectively leaseback approximately 50 per cent of Gross Floor Area of 43,434 sqm for 15 years and all existing third party tenants in the Property will be assigned to A-REIT. The Property will have an occupancy rate of 83.9 per cent and the Vendor will p rovide rental support for the remaining vacant space for three years. With 100 per cent occupancy, the Acquisition is expected to generate a net property income yield of approximately 6.98 per cent (post-acquisition costs) in the first year.
The annualised pro forma fin ancial effect of the Acquisition on distribution per unit would be around 0.118 cent per unit for the financial year ended 31 March 2014.
About the Property Hyflux Innovation Centre is located within the Kallang Industrial Estate and is within three minutes' walk to Boon Keng MRT station along the North-East Line.
The Property is a JTC leasehold estate with land lease expiring in Dec 2068.
It is easily accessible to other parts of Singapore via Pan-Island Expressway (PIE), Central Expressway (CTE) and Kallang-Paya Lebar Expressway (KPE). It is also within walking distance to the future Downtown Line's Bendemeer station, which is expected to complete in 2017.
The Property is a 10-storey high-specifications building with a basement and surface car park.
Current tenants include Hyflux, NEC, Covidien Private Ltd, American Express and Renesas Electronics Singapore Pte Ltd.
Following the above Acquisition, A-REIT's weighted average lease term to expiry is expected to increase from 3.85 years to 3.96 years.
A-REIT will own a total of 103 properties in Singapore and two business park properties in China.
THE purchase of Hyflux Innovation Centre and the leaseback arrangement with Hyflux Limited is expected to generate a net property income yield of about 6.98 per cent, post acquisition costs, in the first year, Ascendas Real Estate Investment Trust (A-reit) said.
Here is the statement from A-reit:
Ascendas Funds Management(S) Limited, the manager of Ascendas Real Estate Investment Trust ("A-REIT") (the "Manager" of A-REIT), is pleased to a nnounce the proposed acquisition of Hyflux Innovation Centre located at 80 Bendemeer Road (the "Property") (the "Acquisition"), for a total purchase consideration of S$191.2 million (the " Purchase Consideration").
Mr Tan Ser Ping, Executive Director and Chief Executive Officer of the Manager said, "We are pleased to strengthen our relationship with Hyflux Ltd, with a sale-and-leaseback arrangement at Hyflux Innovation Centre.
This property is a prime high-specifications development located at the fringe of the central business district.
Hyflux's commitment to lease 50 per cent of gross floor area for 15 years will extend A-REIT's weighted lease expiry profile to 3.96 years."
Details of the Acquisition
HSBC Institutional Trust Services (Singapore) Limited (as trustee of A-REIT) has entered into a conditional sale and purchase agreement (the "Sale and Purchase Agreement") with Hyflux Innovation Centre Pte Ltd (the "Vendor") on 25 June 2014 to acquire Hyflux Innovation Centre for S$1 70.0 million. In addition, an upfront land premium of S$21.2 million for the remaining land lease of the first 30 years term will be payable to Jurong Town Corporation ("JTC") upon the assignment of the land lease to A-REIT.
A-REIT is expected to incur transaction costs of about S$2.66million, which include S$1.7 million in acquisition fees payable to the Manager (being 1 per cent of the consideration payable to the Vendor). The Acquisition is expected to complete on 30 June 2014.
Upon completion of the Acquisition, the Vendor and Hydroch em Pte Ltd will collectively leaseback approximately 50 per cent of Gross Floor Area of 43,434 sqm for 15 years and all existing third party tenants in the Property will be assigned to A-REIT. The Property will have an occupancy rate of 83.9 per cent and the Vendor will p rovide rental support for the remaining vacant space for three years. With 100 per cent occupancy, the Acquisition is expected to generate a net property income yield of approximately 6.98 per cent (post-acquisition costs) in the first year.
The annualised pro forma fin ancial effect of the Acquisition on distribution per unit would be around 0.118 cent per unit for the financial year ended 31 March 2014.
About the Property Hyflux Innovation Centre is located within the Kallang Industrial Estate and is within three minutes' walk to Boon Keng MRT station along the North-East Line.
The Property is a JTC leasehold estate with land lease expiring in Dec 2068.
It is easily accessible to other parts of Singapore via Pan-Island Expressway (PIE), Central Expressway (CTE) and Kallang-Paya Lebar Expressway (KPE). It is also within walking distance to the future Downtown Line's Bendemeer station, which is expected to complete in 2017.
The Property is a 10-storey high-specifications building with a basement and surface car park.
Current tenants include Hyflux, NEC, Covidien Private Ltd, American Express and Renesas Electronics Singapore Pte Ltd.
Following the above Acquisition, A-REIT's weighted average lease term to expiry is expected to increase from 3.85 years to 3.96 years.
A-REIT will own a total of 103 properties in Singapore and two business park properties in China.