New property development in Singapore could bolster Ascendas REIT

$109m of the proceeds from its private placement will go to partially fund the development of a build-to-suit facility located in Singapore.

Ascendas Real Investment Trust (AREIT) could bolster the growth of its Singapore presence at a higher-than-market yield through its proposed development of a new built to suit (BTS) property in Singapore, CGS-CIMB analyst Lock Mun Yee said.

The firm has priced a private placement worth $452m of which $250m of the proceeds will partially fund a UK logistics portfolio. Meanwhile, $109m will go to partially fund the development of a build-to-suit facility located in Singapore.

The analyst noted that AREIT indicated that the high quality of the properties in the second logistics portfolio would further strengthen the REIT’s positioning and platform in the UK as well as enlarge its tenant base with additional quality tenants.

“We note that the post-transaction assets under management (AUM) is expected to expand to $11.4b from $10.8b after the recent UK acquisition and Singapore divestment, implying $639m worth of asset purchases,” the analyst said.

Aside from using the proceeds of the placement for acquisitions, the firm announced that it will utilise $88.9m for debt repayment and future acquisitions.