Ascendas REIT sells 10 Woodlands Link property for $19.3m

They are selling it to Sengkang at a premium.

According to RHB, Ascendas REIT (A-REIT) announced the divestment of its 10 Woodlands Link (formerly NNB Building) property to Sengkang Import & Export Pte Ltd for $19.3m. The buyer is a licensed importer of rice and various food products. The property is located in Woodlands East Industrial Estate, and is a light industrial building comprising a three-storey warehouse.

The property has been vacant since Dec 2016 after the expiry of its single tenant’s lease. The building will be sold on as-is basis. 10WL has a remaining land lease tenure of about 38.7 years. The transaction has been approved by JTC Corp and is expected to be completed by 3Q17.

The divestment is positive and in line with A-REIT’s strategy of recycling capital. The sale price is 17% and 61% above its latest book value and original purchase price (2005) respectively, which we deem as highly attractive given the current market conditions.

Here’s more from RHB:

The pro-forma impact (assuming the divestment had completed on 1 Apr 2016) on A-REIT’s FY17 NPI and DPU is very small, at $0.87m (<0.2%) and 0.01 cents respectively. Gearing would be marginally lowered to 33.7% from 33.8%, assuming proceeds are used fully for debt repayments.

We like A-REIT’s efficient capital recycling strategy of divesting non-core assets and acquiring assets with long weighted average lease expiry (WALE) and lease tenures. In FY17, A-REIT divested $441.6m worth of properties and acquired $565.6m of assets in Singapore and Australia.

Maintain our BUY recommendation with unchanged TP of $2.73. Our DDM-derived TP is based on a
CoE of 7.5% and terminal growth of 1.5%. The stock currently offers FY18F-19F yields of 6.1%/6.2% respectively.

Join Singapore Business Review community
Since you're here...

...there are many ways you can work with us to advertise your company and connect to your customers. Our team can help you dight and create an advertising campaign, in print and digital, on this website and in print magazine.

We can also organize a real life or digital event for you and find thought leader speakers as well as industry leaders, who could be your potential partners, to join the event. We also run some awards programmes which give you an opportunity to be recognized for your achievements during the year and you can join this as a participant or a sponsor.

Let us help you drive your business forward with a good partnership!

This got the nod from industry players at Ubisoft Singapore x Gamescom.
This is due to the planned reopening of Singapore’s borders and economy.
This is according to a joint report by SNEF & Kincentric.
DBS expects 150 talents to take part in this initiative.
The country ranked first in innovation input and investment sub-indeces.
Singtel showed the most growth.
Its net promoter score rose 35% in 2021 from end-2020.
This is the first time that the insurance industry has taken the lead against banks.
The initiative is directed towards the promotion of intergenerational dialogue.
This is the result of CapitaLand Limited’s restructuring efforts.
MOM, MND, and MOH were in charge of developing the standards.
Two nightlife establishments were revoked of their food licenses.
Mapletree companies showed the most growth.