Aims Apac Reit to acquire two industrial buildings in Aljunied for S$56.7 million

[SINGAPORE] Aims Apac Reit is proposing to acquire an industrial property – comprising two buildings – in the Aljunied area for around S$56.7 million, the manager announced on Friday (Aug 29).

This comprises the purchase price of S$45.8 million and the JTC upfront land premium contribution of up to S$10.9 million.

The manager said the proposed acquisition is a “strategic addition” to the real estate investment trust’s (Reit) portfolio that offers an “attractive” 8.1 per cent property yield and immediate distribution per unit accretion.

It will increase the Reit’s industrial exposure to 22.7 per cent post-acquisition, from 20.6 per cent. The transaction will also raise its exposure to resilient and essential industries to 82.8 per cent from 82.3 per cent, and lift its portfolio occupancy to 93.9 per cent from 93.7 per cent.

Russell Ng, chief executive of the manager, said: “The acquisition will enhance our portfolio resilience by diversifying the tenant base, improving portfolio occupancy and expanding our exposure to essential industries.”

He added that the property has “in-built annual rental escalations under the anchor lease”.

The property is located at 2 Aljunied Avenue 1. The two buildings have a total land area of 7,481.7 square metres (sq m), a total net lettable area of around 16,082.4 sq m and a gross floor area of 18,662.13 sq m.

They are 97 per cent occupied and supported by a three-year rental guarantee over the vacant 3 per cent of gross floor area.

Situated near the designated Paya Lebar commercial and retail hub, the buildings are a five minute drive from the Pan Island Expressway and a 10-minute walk from Paya Lebar MRT interchange.

Ng noted the property’s potential for future asset enhancement initiatives and repositioning beyond near-term income, given its proximity to the interchange and location in the city-fringe market. “The property is well-suited for high-spec users in the healthcare, life sciences and advanced manufacturing industries that require high power capacity.

“With comparable assets in the area commanding premium rents due to its ease of accessibility to several expressways and excellent connectivity to transport and extensive amenities in the precinct, we see clear long term value-add opportunities,” Ng said.

George Wang, chairman of the manager, highlighted that the acquisition aligns with the Reit’s investment strategy of “acquiring high-quality, income-generating assets” that enhance its tenant and asset diversification and portfolio resilience.

He added that the Reit’s healthy balance sheet positions it to make new acquisitions.

Units of Aims Apac Reit closed Thursday flat at S$1.35.