AIMS APAC REIT plans to acquire Framework Building for $56.65 million, which includes a $10.9 million land premium to be paid to JTC Corporation.
The property, at 2 Aljunied Avenue 1, is expected to give an initial net property income yield of 8.1%, which will translate into a 2.5% DPU accretion based on 100% debt funding.
On a pro forma basis, DPU accretion would be around 0.5% based on the utilisation of proceeds of about $36.20 million from the REIT's 2023 equity fund raising, together with debt funding of some $24.18 million.
“The proposed acquisition of the Framework Building is a strategic addition to our portfolio and reinforces AA REIT’s position as a disciplined, long-term investor in quality industrial assets," says Russell Ng, CEO of the manager.
"The acquisition will enhance our portfolio resilience by diversifying the tenant base, improving portfolio occupancy and expanding our exposure to essential industries. With in-built annual rental escalations under the anchor lease, we are confident that the property will contribute meaningfully to the resilience and growth of AA REIT’s portfolio," he adds.
George Wang, chairman of the manager, says the acquisition is aligned with the REIT's investment strategy of acquiring high-quality, income-generating assets that will enhance its tenant and asset diversification and add to its overall portfolio resilience.
See also: CLAS to acquire three rental properties in Japan for 4 billion yen
“In an uncertain market environment, AA REIT remains well positioned to capture new acquisitions that meet our investment criteria in our core markets of Singapore and Australia to deliver sustainable long-term returns for unitholders,” says Wang.
AA REIT changed hands at $1.35 as at 9.29 am. It is up 6.3% year to date.
