ESR-REIT to divest Singapore property for around S$11M

ESR-REIT property near Singapore’s Tai Seng MRTESR-REIT property near Singapore’s Tai Seng MRT

ESR-REIT has entered a deal to divest the general industrial property at 45 Changi South Avenue 2 in Singapore for S$11.1 million, the REIT’s manager said in a filing to SGX Monday.

The consideration is a 7.8 percent premium to the four-storey property’s fair value of S$10.3 million, based on an independent valuation by Knight Frank at end-2020, the filing said.

“This divestment represents an opportunity for us to divest one of our non-core assets at a premium to book value,” Adrian Chui, CEO and executive director of the REIT’s manager, ESR Funds Management (S), said in the statement.

“Consistent with our ongoing portfolio optimisation strategy to focus on core properties, the divestment will enable us to recycle capital for opportunities with higher returns, thus improving the quality of ESR-REIT’s portfolio while optimising unitholders’ returns. We will continue to actively review our portfolio to deliver greater income stability and identify opportunities for growth,” Chui added.

The sale proceeds are earmarked to repay outstanding borrowings, finance upcoming asset enhancements and/or for general working capital needs, ESR-REIT said.

The divestment isn’t expected to have a material impact on the REIT’s net asset value and net property income for this year, the filing said.

After the deal is completed, ESR-REIT’s portfolio will have 57 properties in Singapore.