AIMS AMP Capital strikes S$77.2m development deal with CWT Limited

20 Gul Way getting phase additions.

In a release, AIMS AMP Capital Industrial REIT (AA REIT) announced it had entered into a conditional development agreement with CWT Limited, which would see further development at 20 Gul Way of an additional 496,944 sqft via a Phase 2 Extension (2E) and Phase Three.

The Conditions Precedent (CPs) in the development agreement include obtaining approvals from Urban Redevelopment Authority (URA), Jurong Town Corporation (JTC) and the mortgagee.

Upon satisfaction of the CPs (estimated to be by August / September 2013), AA REIT and CWT Limited will enter into a design and construction contract, agreement for lease and other related transaction documents. Construction will commence thereafter and is expected to take approximately 17 months.

AIMS AMP Capital Industrial REIT Management Limited’s Chief Executive Officer, Nick McGrath said: “We are pleased to enter into this development agreement with CWT Limited.

Once completed, Phases 2E and Three are forecast to add S$89.41 million to 20 Gul Way’s value, creating an asset valued in total at S$306.42 million and will be the largest asset in our portfolio.”

“By undertaking this further development at the property, we expect to deliver superior returns to our investors, with the net yield on cost of this further development estimated to be around 8.3%3,” Mr McGrath said.

Upon completion of the development, CWT Limited will lease the Phase 2E and Phase 3 warehouses over a period of five years and two months on the ground floor, and 32 months for levels two to five, with an annual rent escalation of two percent.

The total development cost is estimated to be S$77.2 million which will be funded from the S$110.0 million raised in a private placement in April 2013.