ESR-REIT has leased around 168,846 square feet of space at 8 Tuas South Lane to P-way Construction & Engineering, in a deal lessening the REIT’s dependence on troubled Hyflux as a tenant, the REIT’s manager said in a filing to SGX Thursday.
The 8 Tuas South Lane property now has three tenants, including Hyflux Membrane Manufacturing (S), which accounts for 3.1 percent of ESR-REIT’s total rental income as of end-June, down from 3.6 percent, ESR-REIT said. In May, the REIT had said Hyflux Membrane’s two leases accounted for 6.8 percent of its rental income.
“This is part of the manager’s proactive asset management to diversify the tenant concentration risks and improve tenant mix and quality,” the REIT said. “To-date, the property continues to receive strong leasing interest and enquiries due to its close proximity to the upcoming Tuas Megaport.”
P-way Construction & Engineering, which specializes in railway construction, installation and maintenance, has been contracted by the Land Transport Authority to provide track work services, ESR-REIT said.
The railway services firm will use the location for operations related to the upcoming Jurong Region MRT line and for the extension of the Changi Airport Terminal to the train depot at the property, the filing said. It will supply steel fabrication works, store railway equipment and parts and provide dormitories for employees, it added.
The Tuas Megaport is expected to the world’s largest container terminal once completed.
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