Ascendas REIT plans to acquire the Philips APAC Center for $104.8 million from Philips Electronics Singapore, which will leaseback the property and remain as the anchor tenant.
The independent market valuation of the property as of May 31 2022 is $111.5 million.
The six-storey building comprises laboratory, research and development, warehouse and ancillary office space over a gross floor area of 37,975 square metres. It serves as the Dutch conglomerate’s Asean Pacific headquarters.
As at 30 June 2022, the property is leased to a total of four tenants, has an occupancy rate of 95.7% and a long WALE of 4.5 years.
According to Ascendas REIT, the first year net property income yield of the acquisition is around 7.2% and 6.8% pre-transaction costs and post-transaction costs respectively.
Ascendas REIT says the pro forma impact on the distribution per unit for FY2021 ended Dec 2021 is expected to be an improvement of 0.045 Singapore cents, or 0.29% DPU accretion, assuming the acquisition was completed on Jan 1 2021.
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“Singapore remains a key market for Ascendas REIT, making up approximately 60% of total assets under management,” William Tay, CEO and executive director of the REIT manager.
“The acquisition of APAC Center is a natural addition to the portfolio, strengthening our technology and biomedical customer base and improving the overall resilience of the portfolio with its high occupancy of 95.7% and long WALE of 4.5 years,” he adds.
Upon completion of the proposed acquisition, Ascendas REIT will own 229 properties comprising 96 properties in Singapore, 36 properties in Australia, 48 properties in the United States and 49 properties in Europe.
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The proposed acquisition is expected to complete in the second half of 2022, and will be funded by internal resources.
Ascendas REIT closed on Aug 4 at $3.02, up 1% for the day.
