After a decade of providing leisure and edutainment, JCUBE will close its doors to make way for JCube Condo Residence, a 40-storey residential and commercial development, in 2023. JCube Condo Residence will be connected to amenities and other developments and is expected to alleviate pent-up JCube Residence demand for housing in Jurong.

CLAR has announced the divestment of Singapore industrial building KA Place for a consideration of $35.38 million. A sale and purchase agreement has been entered into by the REIT’s trustee, HSBC Institutional Trust Services (Singapore). This represents a substantial 219% premium to CLAR’s purchase price of $11.1 million in March 2005 as well as a 55% premium to the property’s market valuation of $22.8 million as at Dec 31, 2022.

KA Place is a seven-storey high-specification industrial building with a carpark on the second storey and a total gross floor area of 10,163 sq m. It has a remaining land lease tenure of approximately 35 years.

The proposed divestment is part of the manager’s proactive asset management strategy to improve the quality of CLAR’s portfolio and optimise returns for unitholders, as well as a perfect opportunity to redeploy the capital towards other potential value-adding investments. If the divestment was completed on Jan 1, 2022, the pro-forma impact on CLAR’s net property income (NPI) and distribution per unit (DPU) would have been a decrease of $0.92 million and 0.005 Singapore cents, respectively. The expected net proceeds after deducting divestment costs are projected to be $30.65 million.

These proceeds could go towards funding committed investments, repaying existing indebtedness, extending loans to subsidiaries, funding general corporate and working capital needs and/or making distributions to unitholders. Such an action would reduce CLAR’s aggregate leverage from 36.3% to approximately 36.2%. The proposed divestment is expected to complete within 2Q2023.

Assuming it does, the REIT will own 229 properties comprising 96 properties in Singapore, 36 properties in Australia, 48 properties in the United States and 49 properties in the United Kingdom and Europe.

In accordance with its trust deed, the manager is entitled to a divestment fee of 0.5% of the sale consideration of the property, which would be paid in cash.

Units in CapitaLand Ascendas REIT closed 3 cents higher, or 1.05% up, at $2.88 on April 20.

The sale of KA Place represents a considerable premium on the REIT’s original purchase price and also a good chance to deploy the capital towards other value-adding opportunities. After careful evaluation, the manager of CapitaLand Ascendas REIT has decided that now is a good time to divest the property. Net proceeds are expected to reach $30.65 million and could be used to pay off existing debts, fund investments and/or make distributions to unitholders. On completion of the divestment, CLAR is likely to own 229 properties.

The trust deed also entitles the manager to a divestment fee of 0.5% of the sale consideration, which will be paid in cash. Unitholders responded positively to the announcement, with units in CapitaLand Ascendas REIT closing 3 cents higher at $2.88 on April 20.