Cache Logistics Trust’s manager said on Friday that it would divest Jinshan Chemical Warehouse in China for 87 million yuan, or around S$17.8 million, above its valuation, to Zhejiang Yongtai Logistics.
Jinshan Chemical Warehouse, which is owned by Cache Logistics’ wholly owned subsididary CWT Warehousing Transportation (Shanghai) Development, was acquired in 2011 for 71.0 million yuan and was last valued at 77.3 million yuan in August, it said in a filing to SGX after the market close on Friday.
Cache is expected to recognize an estimated divestment gain of around 1.3 million yuan, it said.
The property, which was developed in 2007, is a dangerous goods warehouse in Caojing Town, Jinshan District, within the Shanghai Chemical Industry Park in Shanghai, the statement said. It has four single-storey chemical warehouse buildings with office space and land use rights of 50 years from September 2006, it said.
Because of safety regulations on design and layout, it has limited redevelopment potential, the statement said.
The proposed divestment is expected to be completed by 31 December, the statement said.
“The proposed divestment of Jinshan Chemical Warehouse will allow Cache to recycle capital into other higher-performing assets and achieve operating efficiencies,” Daniel Cerf, CEO of the trust’s manager, ARA Trust Management (Cache), said in the statement.
Over the past three years, Cache has divested lower-yielding, lesser-performing properties deemed to have limited potential, the statement said. That included divestment of Kim Heng Warehouse in 2015, Cache Changi Districentre 3 in 2017, and Hi-Speed Logistics Centre in 2018, the statement said.
“With the capital released from these divestments, Cache has diversified its portfolio and expanded into Australia where it now owns a total of 16 logistics warehouses which make up almost one-third of its portfolio,” it said.