Mapletree Logistics Trust’s manager said on Tuesday it had entered an option agreement with Setsco Services for the proposed divestment of 531 Bukit Batok Street 23 in Singapore for S$22.4 million.
The property was acquired in 2005 for S$20.32 million and valued at S$22.4 million at end-March, it said.
“The proposed divestment is in line with MLT’s strategy to rejuvenate the portfolio through proactive asset management efforts, including selective divestment of low-yielding properties with older warehouse specifications and limited redevelopment potential,” it said in a filing to SGX after the market close on Tuesday.
“Capital released from the proposed divestment will improve MLT’s financial flexibility to pursue investments of higher quality assets,” it added.
The property is a six-storey warehouse served by cargo lifts, with a gross floor area of 18,843 square meters on a land site of around 7,555 square meters, it said.
“With a current plot ratio of 2.49 as compared to the maximum allowable of 2.5, there is limited scope to increase the gross floor area of the property. Given its relatively small land area, there is also limited potential for redevelopment into a ramp-up logistics facility,” the filing from Mapletree Logistics Trust said.
JTC Corporation has given in-principle approval for the transaction, subject to conditions, it said.
The deal is expected to be completed by October, it said, adding it wasn’t expected to have a material impact on Mapletree Logistics Trust’s net asset value and net property income for the financial year.