Ascendas Real Estate Investment Trust (Ascendas Reit) has announced the proposed acquisition of a cold storage logistics facility located at 1 Buroh Lane, Singapore for S$191.9 million.
The property is situated in the western region of Singapore within the Jalan Buroh Food Zone where over 30 licensed food establishments are located. It is located within a 5- minute drive to Ayer Rajah Expressway and is in close proximity to Singapore’s major sea ports e.g. Jurong Port and Tuas Mega Port.
The property is a five-storey ramp-up logistics distribution centre with chiller, freezer, airconditioned and ambient storage space as well as ancillary office space. Its specifications cater to the diverse requirements of food producers and distributors, food & beverage retailers and importers etc. who require different types of storage space under one roof.
The modern cold storage facility was newly built about 7 years ago.
William Tay, Executive Director and Chief Executive Officer of the Manager said, “This is our first cold storage facility investment in Singapore. This modern Grade-A 5-storey ramp-up logistics facility is one of the best cold storage facilities in Singapore. Featuring a good combination of chiller, freezer and ambient storage spaces, it caters to a diverse food and beverage storage requirements. We are confident to achieve good rental growth due to the limited supply and strong demand for this type of facilities.”
The property is fully occupied by five well-established tenants including a supermarket chain and leading distributors of fruits and vegetables.
With a long WALE of 7.0 years and built-in rent escalations of 2% to 3% every three years, the proposed acquisition is expected to expand Ascendas Reit’s customer base and strengthen its income stability, according to the REIT.
Ascendas Reit said the estimated net property income (NPI) yield for the first year post acquisition is approximately 7.0% and 6.9% pre-transaction costs and post-transaction costs respectively.
The proposed acquisition is expected to be completed in the fourth quarter of 2022.