Soilbuild Business Space REIT has entered a deal to divest a property at 72 Loyang Way in Singapore to an unrelated third party, Kim Hock Enterprise, for S$34.08 million, the REIT manager said in a filing to SGX after the market close on Thursday.
The property includes two blocks of three-storey and four-storey ancillary office, two high-ceiling single-story production facilities, a blasting and spray-painting chamber, a working dormitory and a jetty with 142 meters of sea frontage, the filing said. It is a JTC leasehold property with a remaining tenure of around 19 years, the filing said.
The REIT manager said it had been difficult to find a replacement tenant for the property due to prolonged weakness in the marine offshore and oil and gas sectors, coupled with JTC requirements, which include worker pay and occupying at least 70 percent of the premises.
JTC is a Singapore government statutory board responsible for developing and managing industrial estates.
“Given the relatively short balance land lease tenure of 19 years, the manager seeks to realize the maximum value of 72 Loyang Way before its value declines further over time,” the filing said. “Holding a low-yielding property indefinitely in anticipation of a recovery in the
marine offshore and oil & gas sector may weaken current portfolio performance.”
The sale proceeds may be used to repay borrowings, make acquisitions, perform asset enhancement initiatives or for other growth opportunities, the REIT manager said.
The property was independently valued by Colliers International Consultancy & Valuation (Singapore) at S$34.0 million at end-December, the filing said. It was purchased in 2015 at S$97 million.