AIMS APAC REIT (AA REIT), listed on SGX, agreed to acquire a four-story warehouse in Jurong District in western Singapore for S$129.6 million ($94.4 million), signing the city’s largest trade agreement to date in 2020 as investors compete for logistics. investment opportunities.
AA REIT acquires the acceleration logistics facility at 7 Bulim Street, in the center of the commercial district, from personal developer Titan Wenya, a sales and acquisition option agreement, the assignment is fully rented to a unit of Japanese cargo giant Kintetsu. World Express.
The publicly traded company accepts as true with acquires the installation of 68,190 square meters (733,991 square feet) for the equivalent of S$176.57 consistent with the square foot, with the REIT manager pronouncing the transaction on the Singapore Stock Exchange earlier in the day.
“The proposed acquisition further strengthens AA REIT’s portfolio of commercial and logistics assets in Singapore and is consistent with our strategy of building a portfolio of diversified assets that create a long-term price for our shareholders,” said Koh Wee Lih, CEO of AA REIT Managing. Director.
Including transaction fees, the indexe accepts it as true with expecting to spend S$135.5 million to obtain the property, which occupies a site of 34,095 square meters.
Koh indicated, however, that the investment vehicle may be waiting for the acquisition of assets to increase its revenue. “The acquisition of returns will increase the revenue from AA REIT’s portfolio under the challenging market conditions, and the solid lease and principal tenant ensure some stability.”
Acceptance as true with the manager stated that he expects the acquisition to generate a source of net income from genuine assets of S$9.2 million during the first year through its lease to the Japanese carrier, providing an initial return of 7.07%. Kintetsu signed a 10-year main lease to the warehouse as of January 2014 and has a renewal option for another five years.
The sponsor of REIT AIMS, a Sydney-based fund manager with A$2 billion ($1.4 billion) in managed assets, has increased its presence in Singapore over the past decade since the acquisition of fund manager MacArthur Cook, which was AA’s original sponsor. REIT, in 2009. Through AA REIT, formerly known as the macArthur Trust Industrial REIT, it now manages 26 homes in the Southeast Asian Financial Center, adding this latest top acquisition.
With consumers staying at home after the Singapore government imposed social estrangement measures to curb the spread of COVID-19 this year, the development of a call for e-commerce helped keep commercial home rentals solid in the city this quarter, even as rental rates fell according to JLL.
At Jurong, where AA REIT made its purchase, assets will gain advantages from the ongoing progression of government infrastructure, said Rimon Ambarchi, head of industry and logistics in Singapore and Southeast Asia at CBRE, who negotiated the transaction.
“We are experiencing higher demand for commercial and logistics assets than before COVID and the investor base is much more diversified,” ambarchi said. “The sale procedure for 7 Bulim Street we carry out is an example of this, where we have faced ferocious tenders from a multitude of investors.”
Jurong’s trading houses have been among institutional investors because of their proximity to the 600-hectare Jurong Innovation District, which has already attracted German engineering giants Bosch Rexroth and Siemens as tenants and the Port of Tuas Project, which will be the world’s largest fully automated cargo. terminal when fully operational until 2040.
In Jurong, AA REIT’s new revival hangar will be incorporated into a government-backed built-in production facility that will come with an underground logistics network, self-driving cars and other AI-based technologies when finished in 2022, in line with what was announced in the past. Plans.
With the acquisition, AA REIT joins other institutional investors who exploit the strong source of rental income presented through Singapore’s commercial properties, which have proven to be among the city’s toughest assets after genuine real estate investment in the country fell by more than two-thirds in the first six months. due to the economic effect of the COVID-19 pandemic.
As the pandemic wiped out hotels, offices and grocery shopping malls in May, a $1.2 billion real estate fund controlled through Logos Group acquired a re-expansion in Jurong of the SGX-listed CSC Holdings corporate structure. The Australian expander and fund manager, along with a partner, plans to invest S$108 million to demolish the existing structure in it and expand a six-story warehouse.
The same month Logos signed his deal with Jurong, Deutsche Bank DWS’s partner acquired a 403,000-square-foot warehouse in the district of an undisclosed fund of between $75 million and $100 million.
In Asia Pacific, Singapore has a favorite destination for institutional investors looking to deploy about $20 billion in capital for logistics households this year, according to JLL.
“Singapore is a gem in terms of stability, it’s a capital haven,” said Stuart Ross, JLL’s executive director and head of commercial housing in Southeast Asia. “Due to the disruption caused by COVID-19, foreign investors have the opportunity to interact in high-quality trading assets in Singapore. Some corporations seek to liquidate assets to access cash.”