UPDATE: Ascendas REIT to develop S$181 million build-to-suit project for Grab headquarters

A Grab taxi in SingaporeA Grab taxi in Singapore

Ascendas REIT agreed to design, develop and manage ride-sharing platform Grab’s new headquarters in Singapore in a S$181.2 million build-to-suit project, it said in a filing to SGX after the market close on Wednesday.

The building, which will be located in the one-north business park, is expected to be ready by the fourth quarter of 2020 and will house Grab’s Singapore offices and its largest research and development center, the filing said.

William Tay, CEO and executive director of Ascendas Funds Management (S), the REIT’s manager, said in the statement that Grab’s long lease commitment of 11 years will provide the REIT with a stable stream of revenue.

Grab also has the option to renew for another five years, and the lease includes annual rent increases, it said.

On a pro forma basis, it estimated the project would have added 0.033 Singapore cent to its previous fiscal year’s distribution per unit if it had held it for all of the financial year ended 31 March, and that the net property income yield would be around 6.4 percent.

Ong Chin Yin, head of people at Grab, said the new building will enable the company to bring its employees under one roof.

“The increased capacity of our headquarters will also enable us to achieve our ambitions of becoming the leading super-app in Southeast Asia,” she said in the statement. “To this end, we have plans to create and hire for a thousand more exciting roles globally over the next 12 months.”

Including the new building, the total asset value of Ascendas REIT’s Singapore portfolio would rise to S$8.9 million from S$8.7 billion, with the proportion of business and science park properties rising to 43 percent from 42 percent, the statement said.

The development cost will be funded via a combination of the proceeds of Ascendas REIT’s private placement in September and internal resources and/or existing debt facilities, it said.

The project will incorporate greenery on the ground and mid-level sky terraces, as well as bicycle parking, lockers and shower facilities to encourage employees to use cycling to commute, it said.

Among other green features, the building will use recycled building materials and an energy efficient low emissive glass facade to reduce solar heat gain, as part of an effort to obtain the Green Mark Gold Plus certification from Singapore authorities.

This article was originally published on Wednesday, 30 January 2019 at 20:12 SGT; it has since been updated.

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