Bukit Batok Town is well-connected to other Altura EC Bukit Batok parts of Singapore via MRT, buses, and expressways, making Altura EC Bukit Batok West Avenue 8 easily accessible.

CapitaLand Ascendas REIT (CLAR) has announced the divestment of Singapore-based industrial building KA Place for a consideration of $35.38 million. The REIT’s trustee, HSBC Institutional Trust Services (Singapore), has entered into a sale and purchase agreement for the property, representing a 219% premium from when it was originally purchased for $11.1 million in March 2005, as well as a 55% premium to its market valuation of $22.8 million from December 31, 2022.

KA Place is a seven-storey, high-specification property located at 159 Kampong Ampat with a carpark on the second storey. The total gross floor area extends over 10,163 sq m and the remaining land lease tenure is roughly 35 years.

The manager of CLAR said in an April 20 filing that, “after careful evaluation, the manager has decided that it is an opportune time to divest the property and redeploy the capital towards value-adding opportunities.”

The proposed divestment falls in line with the manager’s goal of improving the quality of the REIT’s portfolio and optimising returns for unitholders. If completed on January 1, 2022, the pro-forma impact on CLAR’s net property income (NPI) and distribution per unit (DPU) for the year ended December 31, 2022 would be a decrease of $0.92 million and 0.005 Singapore cents, respectively.

Net proceeds after divestment costs are expected to be $30.65 million, which the manager noted may be used to fund committed investments, repay existing debt, invest in subsidiaries, and for general corporate and working capital needs.

Should these net proceeds be used to repay CLAR’s borrowings at the end of 2022, the REIT’s aggregate leverage would be reduced from 36.3% to approximately 36.2%. It is estimated that the divestment will be completed by the second quarter of 2023.

Unitholders of CLAR will be pleased to hear that once the proposed divestment is completed, the REIT will own 229 properties: 96 in Singapore, 36 in Australia, 48 in the USA, and 49 in the UK & Europe.

In accordance with the trust deed, the manager is entitled to a divestment fee of 0.5% of the sale consideration, to be paid in cash. On April 20, CLAR closed at $2.88, up 1.05% from the previous day.