Viva Industrial Trust agrees to buy two buildings for $111.5m

SINGAPORE - Viva Industrial Trust has agreed to acquire two light industrial buildings in Singapore for $111.5 million in total.

It is proposing to pay $80 million for Jackson Square in Lorong 3 Toa Payoh and $31.5 million for Jackson Design Hub in Tai Seng Street, according to a filing to the Singapore Exchange on Friday.

The Singapore-listed trust will also pay $1.1 million in acquisition fees, and about $0.2 million in other professional and transaction fees. Including these expenses, the total cost of acquiring the properties works out to $112.8 million.

Jackson Square comprises four blocks of light industrial buildings, ranging from two to six storeys each, with a gross floor area (GFA) of about 418,586 sq ft.

Jackson Design Hub, a five-storey modern light industrial building, has a GFA of about 85,070 sq ft.

The price for both properties is slightly under valuation. Jackson Square was valued at $82 million on Aug 1. Jackson Design Hub was valued at $33.4 million on the same date, including an estimated $3.5 million upfront land premium.

Jackson Square will come with a five-year rental income support arrangement, while Jackson Design Hub will be leased back to its seller, Jackson Global, for 10 years with an annual rental escalation of 2 per cent.

The proposed acquisition is aimed at diversifying Viva Industrial Trust's current portfolio "by adding light industrial properties as a new asset class", according to the trust's filing.

Following the acquisition, the trust's top 10 tenants will contribute a smaller 47.6 per cent to its property income, down from 53.1 per cent.

The acquisition will be financed by a combination of debt and equity funding.