CapitaLand Ascendas REIT’s (CLAR) manager has agreed to divest 21 Jalan Buroh in Singapore for $112.8 million. 21 Jalan Buroh is a three-storey ramp-up warehouse with a seven-storey ancillary office block.
The proposed sale price is at a significant premium to the original purchase price of $58.4 million when CLAR acquired the property in 2006, and at a premium to the average of two independent market valuations $67.5 million as at July 1. The estimated sale proceeds are likely to be $102.9 million.
The divestment of the property is not expected to impact CLAR’s NAV and DPU for FY2024.
On a pro forma basis, the NPI would fall by $4.6 million, and DPU would decline by 0.085 cents. Pro forma aggregate leverage would be 37.4% instead o 37.9%. CLAR’s FY2024 NPI was $1.032 billion, and DPU was 15.16 cents.
The proposed divestment is expected to complete within the fourth quarter of 2024. Following the completion, CLAR will own 228 properties comprising 96 properties in Singapore, 34 properties in Australia, 48 properties in the United States, and 50 properties in the United Kingdom/Europe.
Because, it is reported, they had “no appointment to liaise with the developer”.
Property editor Daniel Raymond is exect about at least a dozen factors that play a role in decisions about which properties will agree to use CLAR, but doesn’t directly point to a single matter—which-then-could-nots are the reasons for this disposing, although some ideas like why land-transfer tax must change hands could have consequences at some stage in the process.
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