Ascendas REIT grabs Hyflux property for $191.2m

The deal is set to be closed on Monday.

Ascendas REIT has pounced on the 10-storey Hyflux Innovation Centre for $191.2m, the company announced today.

According to A-REIT, the Centre will be acquired from Hyflux Ltd for $170m, with an additional $21.2m payable to Jurong Town Corporation upon the assignment of the land lease to A-REIT.

“A-REIT is expected to incur transaction costs of about S$2.66 million, which include S$1.7 million in acquisition fees payable to the Manager (being 1% of the consideration payable to the Vendor). The Acquisition is expected to complete on 30 June 2014,” the statement noted.

Here’s more from A-REIT:

Upon completion of the Acquisition, the Vendor and Hydrochem Pte Ltd will collectively leaseback approximately 50% of Gross Floor Area of 43,434 sqm for 15 years and all existing third party tenants in the Property will be assigned to A-REIT.

The Property will have an occupancy rate of 83.9% and the Vendor will provide rental support for the remaining vacant space for three years.

With 100% occupancy, the Acquisition is expected to generate a net property income yield of approximately 6.98% (post-acquisition costs) in the first year. The annualised pro forma financial effect of the Acquisition on distribution per unit would be around 0.118 cent per unit for the financial year ended 31 March 2014.

Hyflux Innovation Centre is located within the Kallang Industrial Estate and is within three minutes’ walk to Boon Keng MRT station along the North-East Line.

The Property is a JTC leasehold estate with land lease expiring in Dec 2068. It is easily accessible to other parts of Singapore via Pan-Island Expressway (PIE), Central Expressway (CTE) and Kallang-Paya Lebar Expressway (KPE).

It is also within walking distance to the future Downtown Line’s Bendemeer station, which is expected to complete in 2017.