Cambridge Industrial Trust divests entire stake in 63 Hillview Avenue

$140.8m proceeds going to debt repayment, AEIs.

In a disclosure to the Singapore Exchange, Cambridge Industrial Trust Management Limited, as manager of Cambridge Industrial Trust (CIT) announced that CIT has divested its entire stake in the freehold property located at 63 Hillview Avenue, Lam Soon Industrial Building, Singapore 669569 for a consideration of S$140.8 million (excluding divestment costs and applicable goods and services tax).

The Sale Consideration of S$140.8 million represents a premium of approximately 28% above the current book value of CIT’s entire stake in the Property of S$110.0 million.

The sale proceeds from the Divestment will be used for the repayment of debt, acquisition opportunities, asset enhancement initiatives or developments and for working capital purposes.

CIT’s investment in the Property is delivering a net property income yield of approximately 2.9% per annum based on the current book value of CIT’s entire stake in the Property. The borrowings to be repaid by the sale proceeds have a current interest margin of approximately 3.0% per annum, resulting in a net increase to CIT’s distributable income from the transaction.

The Property is a freehold 10-storey light industrial strata-titled development comprising 154 strata warehouses and light industrial factory units. The stake in the Property being sold by CIT comprises 97 freehold strata units (the “Strata Units”), which make up approximately 69.4% of the strata share value in the Property.

The sale of the Strata Units has been effected by a series of conditional Option to Purchase Agreements (collectively the OTPs). RBC Investor Services Trust Singapore Limited, in its capacity as trustee of CIT, has entered into the OTPs with the wholly-owned subsidiaries of QF Properties Pte. Ltd., which is in turn wholly-owned by EH Property & Investments Pte. Ltd. (EH Property).

EH Property is jointly set up by Enviro-Hub Holdings Ltd (Enviro-Hub) and BS Capital Pte. Ltd. (BS Capital). Enviro-Hub is listed on the Main Board of Singapore Exchange Securities Trading Limited (the SGX-ST) and is one of the providers of total environmental management solutions for electrical, electronic and equipment industries. Mr Raymond Ng Ah Hua, a controlling shareholder and Executive Chairman of Enviro-Hub, is the sole owner of BS Capital.

The sale of the Strata Units follows a lengthy process to secure an en bloc sale of the Property. This process was not successful and was discontinued with the lapse of the collective sale agreement. Since then, the Manager has pursued alternatives for the realisation of the value embedded in CIT’s investment in the Property.