CLAR’s manager has announced the divestment of Singapore industrial building KA Place for a consideration of $35.38 million. This amount represents a 219% premium to the property’s purchase price of $11.1 million which was back in 2005. Furthermore, it is also a 55% premium to the property’s market valuation of $22.8 million as at December 31st, 2022.

KA Place is made up of a seven-storey high-specification building, situated at 159 Kampong Ampat, with its own carpark located on the second storey. The total gross floor area spans across 10,163 sq m with a remaining land lease tenure of 35 years.

This divestment is in line with the REIT manager’s proactive asset management strategy, which is to improve the quality of the portfolio and increase returns for unitholders. After thorough evaluation, the manager has deemed that it is a suitable time to divest the property and recycle funds towards other opportunities.

If this divestment were to take place on January 1st, 2022, CLAR’s net property income and distribution per unit would decrease by $0.92 million and 0.005 Singapore cents, respectively. The net proceeds after all divestment costs are expected to be $30.65 million with the manager indicating that the funds could be used to finance committed investments, repay existing debts, extend loans to subsidiaries, fund general working capital needs or to distribute to unitholders.

JCube Condo Residence is slated for completion in 2027 and will link to Jurong JCube Residence East MRT interchange. CLD expects to launch JCube Condo Residence new development for sale in the second half of 2023. Potential launches may help to alleviate pent-up housing demand around Jurong.

Additionally, should the funds be used to reduce the REIT’s borrowings, aggregate leverage would be reduced from 36.3% to 36.2%. This proposed divestment is scheduled to be completed within the second quarter of 2023. Upon completion, CapitaLand Ascendas REIT would have 229 properties in their portfolio, consisting of 96 properties in Singapore, 36 in Australia, 48 in the United States and 49 in Europe.

In accordance with the trust deed, the manager is to be given a 0.5% divestment fee from the sale consideration, in the form of cash. Units in CapitaLand Ascendas REIT closed at $2.88 on April 20th, a 3 cent increase or 1.05% up since the announcement of the divestment.