Sabana REIT acquires 2 Toh Tuck Link for S$40.3m

The property is a 6-storey warehouse with a gross floor area of approximately 180,735 sq ft.

The Board of Directors of Sabana Real Estate Investment Management Pte. Ltd., as manager of Sabana Shari’ah Compliant Industrial Real Estate Investment Trust, wishes to announce that HSBC Institutional Trust Services Limited, in its capacity as trustee of Sabana REIT, has on this day, entered into a sale and purchase agreement with Winfred Pte. Ltd. in relation to the acquisition of the property located at 2 Toh Tuck Link, Singapore.

On completion of the Acquisition of the Property, a master lease agreement will be entered into between the Trustee and the Vendor pursuant to which the Vendor will take a master lease of the property for a term of three years.

The Manager is of the view that the Acquisition is in the ordinary course of Sabana REIT’s business as the Property being acquired is within the investment strategy of Sabana REIT and does not change the risk profile of Sabana REIT.

INFORMATION ON THE PROPERTY

The Property is a 6-storey warehouse located along Toh Tuck Link, off Toh Tuck Avenue, about 15.6km from the city centre, with a gross floor area of approximately 180,735 square feet. The Property is a JTC leasehold estate of 30 + 30 years tenure commencing from 16 December 1996, with a remaining tenure of approximately 45.3 years.

The Property was independently valued by CKS Property Consultants Pte Ltd on 12 August 2011 at  S$39,800,000.00 using the discounted cash flow analysis, direct comparison method and capitalisation of income approach.

DETAILS OF THE ACQUISITION AND LEASE

The Property is being sold on a sale and leaseback basis wherein the Vendor will, upon completion of the acquisition of the Property, take a master lease of the entire premises for a term of three years on a triple net basis.

The purchase consideration for the Property is S$39,800,000.00 which was arrived at on a willing buyer and willing seller basis.

Sabana REIT has on this day, arranged for the payment of a cash deposit of S$398,000.00, equivalent to one percent of the Purchase Consideration, which is to be paid into the escrow account, in compliance with the Conveyancing and Law of Property Rules 2011, maintained jointly by the Vendor’s solicitors and Sabana REIT’s solicitors for the purpose of the Acquisition.

The balance of the Purchase Consideration shall be payable in cash on completion of the Acquisition which is expected to take place in the fourth quarter of 2011, or such other date as may be agreed by the Vendor and the Trustee.

ESTIMATED COST OF THE ACQUISITION

The estimated total cost of the Acquisition excluding all taxes is approximately S$40,398,000.00, comprising:

a. The Purchase Consideration of S$39,800,000.00;
b. The acquisition fee payable to the Manager under the trust deed dated 29 October 2010 constituting Sabana REIT entered into between the Trustee and the Manager in respect of the Acquisition, which amounts to approximately S$398,000.00; and
c. The professional and other fees and expenses incurred or to be incurred in connection with the Acquisition which amount to approximately S$200,000.00.