In an official announcement, Aims Apac Reit stated that this is the first acquisition for the group in the city fringe and the location is well connected to the Central Business District.
There are currently nine existing tenants in the building holding lease agreements and these include businesses in Consumer Products, Information Technology, Medical, Food and Beverages and Business Services.
Under the current market rate the property would yield 5.9% in initial net property income (NPI) and is DPU (Distribution Per Unit) accretive.
As per the pro forma funding structure this acquisition would translate to an addition of 0.48 Singapore cents for Fy2020 DPU to the existing 9.5 Singapore cents taking it to 9.98 Singapore cents.
Once this acquisition is completed light industrial exposure of Apac Reit would increase to 15.8% from the current 11.7%.
Its portfolio occupancy would marginally change from the existing 95% to 94.5%. WALE (weighted average lease expiry) for Reit’s portfolio would also extend from the current 4.23 years to 4.52 years.
As per information available currently Apac Reit would be funding this acquisition through debt and they would utilize existing debt facilities and also take new term loan.
Apac Reit’s aggregate leverage after this acquisition would go up to 39% which is well within the 50% requirement as per Monetary Authority of Singapore’s guideline.