Capital recycling trend gains traction amongst industrial REITs

Here are some recent deals by players.

Singapore's Industrial REITs have been on a shopping spree lately as they divest relatively old and lower specs.

According to OCBC Investment Research, this could put them in a stronger position to weather the challenges facing Singapore’s industrial market.

Most recently, Cache Logistics Trust proposed to acquire a freehold single-storey warehouse with ancillary office space which is currently 100% leased to Spotlight in Melbourne, Australia, for a purchase consideration of A$22.25m.

"This translates into an initial NPI yield of 7.4%. The proposed acquisition is expected to be funded by net proceeds from CACHE’s recent divestment of one of its Singapore properties which has a remaining land lease of only 17 years," OCBC said.

Meanwhile, Mapletree Logistics Trust proposed to divest its 20 Old Toh Tuck Road property at a sale consideration of $14.25m, which is higher than its purchase price of $11.6m and last valuation of $13.0m. OCBC stated that this 18-year old property has remained vacant since last year, following the expiry of the master lease.

On the other hand, Ascendas REIT has sought to move further up the value chain by completing the acquisition of three built-to-suit Science Park buildings held under a single land title from its sponsor for a purchase consideration of around $420m.