A-REIT acquires business park property in Beijing

The 37,707 sqm Ascendas Z-Link is near a major thoroughfare and a Metro Light Railway station.

The Board of Directors of Ascendas Funds Management (S) Limited (the “Manager”), the manager of Ascendas Real Estate Investment Trust (“A-REIT”), is pleased to announce that A-REIT has made its maiden acquisition in Beijing, China with the purchase of Ascendas Z-Link, a business park property in Zhongguancun Software Park (“ZPark”), within the Haidian District in Beijing (“Ascendas Z-Link” or “the Property”). This was effected through the acquisition of all the shares in Ascendas ZPark (Singapore) Pte. Ltd. (“AZS”) from Ascendas China Industrial and Business Parks Fund (the “Vendor”) for an attributed value of RMB 300 million for the Property. AZS is the holding company of Ascendas Hi-Tech Development (Beijing) Co. Ltd., which in turn, owns the Property.

Mr. Tan Ser Ping, Chief Executive Officer and Executive Director of the Manager said, “We are pleased to enter the Beijing market with the acquisition of Ascendas Z-Link, a quality business park property in Z-Park, Zhongguancun. Z-Park is a state-level park sponsored by the National Ministry of Information Industry catering to information technology and research & development companies, data centres and back up office operations. The good location and building specifications of Ascendas Z-Link is in line with A-REIT’s investment strategy in China, which is to focus primarily in the business & science park segment in major tier one gateway cities such as Beijing and Shanghai. With this acquisition, we welcome Baidu and Raisecom into A-REIT’s portfolio of over 990 customers.” 

Ascendas Z-Link is located at No. 8 Dongbeiwang West Road in the renowned Z-Park in the Haidian District. It is sited on a land area of approximately 37,707 sqm and has a leasable area of 27,450 sqm. Completed in 2004, Ascendas Z-Link is a 3-storey multi-tenanted business park building with four inter-connecting blocks and one level basement car park. It is currently 100% occupied by prominent tenants such as Baidu, Inc.com (the leading internet search company in China and listed on NASDAQ) and Raisecom Technology Co., Ltd (a global equipment provider of innovative last-mile access and aggregation solutions in the telecommunications market).

Ascendas Z-Link is in close proximity to public transportation and is about a five minutes’ drive away from the 5th Ring Road and Badaling Expressway and about a 15 minutes’ walk away from the Metro Light Railway Xi Er Qi Station.

The Vendor agreed to sell all the issued and paid up shares in the capital of AZS (the “Shares”) free from any encumbrances and has also agreed to novate to A-REIT all of its rights and obligations under the shareholder loan of an outstanding amount of about S$15.46 million extended by the Vendor to AZS (the “Shareholder Loan”) free from any encumbrances. The purchase price for the Shares is approximately S$26.33 million while the consideration for the novation of the Shareholder Loan is about S$15.46 million.

A-REIT will incur estimated transactional costs of about S$1.16 million, inclusive of approximately S$0.57 million (being 1% of the attributed value of the Property) being the acquisition fee payable to the Manager. As the Vendor is an interested party of A-REIT, the acquisition fee will be paid in units. These units shall not be sold within one year from their date of issuance, according to an A-REIT report.

The Audit Committee of the Manager (which comprises a majority of the independent directors of the Manager) has reviewed the transaction and is of the view that the acquisition of AZS is on normal commercial terms and is not prejudicial to the interests of A-REIT and its minority Unitholders.

The annualised pro forma financial effect of Ascendas Z-Link on A-REIT’s DPU for FY2010/11 is expected to be 0.02 cents per unit after applicable taxes in China.