CapitaLand Ascendas REIT (CLAR) is divesting Kim Chuan Telecommunications Complex at 38 Kim Chuan Road in Singapore after more than 20 years at double the original purchase price.
According to a July 15 bourse filing, the sale consideration of approximately $200.4 million from CLAR to an unrelated third party is double the $100.0 million CLAR paid for the 10-storey data centre in March 2005.
The consolidation also represents a premium of approximately 32% to the independent market valuation of $151.8 million as at June 30. The valuation for the property was commissioned by the manager and HSBC Institutional Trust Services (Singapore) Limited, in its capacity as trustee of CLAR. It was carried out by Savills using the income capitalisation method and discounted cash flow analysis.
Kim Chuan Telecommunications Complex has a gross floor area of 35,456 sqm. Since its acquisition in 2005, the property had been occupied by a single tenant — Singtel — until April 30 this year.
The estimated net proceeds after divestment costs are expected to be approximately $180.0 million. The net proceeds may be utilised for various purposes, including financing committed investments, paying down debt, extending loans to subsidiaries, funding general corporate and working capital needs and/or making distributions to CLAR unitholders.
Assuming the estimated net proceeds were used to repay CLAR’s borrowings as at March 31, its pro forma aggregate leverage would be approximately 41.4%, lower than 42.0% reported as at March 31.
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The divestment is expected to be completed by 2H2026.
Assuming the divestment had been completed on Jan 1, 2025, the pro forma impact on CLAR’s net property income and distribution per unit for the financial year ended Dec 31, 2025 would be a decrease of $10.0 million and 0.203 cents, respectively.
The divestment of the property is not expected to have any material impact on CLAR’s net asset value and distribution per unit for the financial year ending Dec 31.
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In accordance with the trust deed dated Oct 9, 2002 constituting CLAR, the manager is entitled to a divestment fee of 0.5% of the sale consideration, which will be paid in cash.
Units in CLAR closed flat at $2.49 on July 15, down some 12% year to date.
