ESR-REIT divests 28 Senoko Drive property to Tat Seng Packaging for S$12M

ESR-REIT entered a deal in January 2022 to divest the property at 28 Senoko Drive in Singapore. Credit: ESR-REIT (Photo: RENDY ARYANTO/VVS.sg)ESR-REIT entered a deal in January 2022 to divest the property at 28 Senoko Drive in Singapore. Credit: ESR-REIT (Photo: RENDY ARYANTO/VVS.sg)

ESR-REIT has entered a deal to divest its general industrial property at 28 Senoko Drive in Singapore to Tat Seng Packaging for S$12 million, the REIT said in a filing to SGX Monday.

“In line with our portfolio optimization strategy, this divestment represents an opportunity for us to divest one of our dated and non-core assets where there are limited redevelopment and/or asset enhancement opportunities due to the short remaining land lease,” Adrian Chui, CEO and executive director of the REIT’s manager, said in the statement.

“The divestment allows ESR-REIT to free up capital for growth and higher value opportunities, thus improving the quality of ESR-REIT’s portfolio while optimising unitholders’ returns,” Chui added.

The REIT said the proceeds will be used to repay borrowings and/or fund upcoming asset enhancements, potential acquisitions, unit buybacks and general working capital requirements.

The divestment consideration is an 8.4 percent discount to the fair value of the property of S$13.1 million, based on an independent valuation at end-September 2021, the filing said. The property was acquired in 2007 for S$12 million, the REIT said.

The property, which has a remaining land lease of around 18 years, is a single-storey general industrial building with an adjacent four-storey office building located in the Senoko industrial estate, the filing said.

In a separate filing, Tat Seng Packaging Group said the acquisition was in line with its business plan to own the property it is renting.

The deal is subject to approval from JTC Corp. being obtained by end-January, Tat Seng Packaging said.

 

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