SINGAPORE - AIMS AMP Capital Industrial Reit (AA Reit) will launch its first greenfield project, its manager announced on Thursday (Aug 4)
The S$39.4 million project will be a build-to-suit development of a five-storey production facility for manufacturer Beyonics International.
Beyonics has committed to a 10-year master lease term on the entire property with annual rent escalations throughout the lease term, providing an estimated S$3.5 million in rental income in the first year, AA Reit added.
Boustead Projects has won the contract to develop the project, with construction expected to end by the second half of 2017. The facility, located in Marsiling Industrial Estate, will be built on a 8,611.6 square metre site acquired by AA Reit.
The greenfield project is a "significant step" for AA Reit, following its four prior redevelopments of its existing portfolio facilities, said Mr Koh Wee Lih, chief executive of the reit manager.
The development will impact AA Reit's distribution per unit by 0.3 cents, with its yield on cost estimated to be around 8.9 per cent.
The Reit stressed that it will have sufficient funding capacity for the development, as its pro forma leverage - based on its position at March 31 - will remain at 36 per cent.
AA Reit units pared half a cent or 0.34 per cent to $1.445 at around 10:30am, following the announcement.