Ascendas Real Estate Investment Trust (A-Reit) will acquire the nine-storey One@Changi business park in Singapore for $420 million.
The Reit will acquire the property from a joint venture between Ascendas Development and Frasers Centrepoint, according to a statement yesterday to the Singapore stock exchange.
One@Changi City is a multi-tenanted business park property, with 97.1 per cent occupancy.
It sits on a land area of 46,969 sq m, which has remaining land lease tenure of 53 years, the company said in the statement.
The property has a gross floor area and net lettable area of 71,158 sq m and 63,106 sq m respectively.
A-Reit said the acquisition is expected to generate a net property income yield of 5.9 per cent in the first year of ownership, after acquisition costs.
The acquisition will be partly funded by the sale of new units that will raise at least $408 million, the firm said in a separate announcement.
A-Reit will offer 90 million new units to institutional investors and other parties at an issue price of between $2.223 and $2.290 per unit through a private placement.
Another 93.8 million new units will be on pro-rata and non-renounceable offering on the basis of three new units for every 80 existing units in A-Reit.
Half the proceeds from the sale will be used to fund One@Changi City, while the rest will be used to pay for a potential acquisition of a logistics property in Australia, debt repayment, expenses and future acquisitions, the company said.
After the completion of the acquisition, the Reit will own 103 properties in Singapore, 26 properties in Australia and two properties in China.
Shares of the Singapore-based Reit jumped in September after the firm agreed to buy a portfolio of 26 logistics properties in Australia from the real estate arm of GIC and Frasers Property Australia, according to Bloomberg.
The transaction was A-Reit's biggest acquisition at the time, according to data compiled by Bloomberg.
The shares gained 3 per cent over the past 12 months, closing at $2.38 on Tuesday before the company announced a trading halt yesterday morning.