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Wednesday, February 17, 2010

REIT Financial News - 17 FEB 2010: A-REIT to acquire DBS Asia Hub and 31 Joo Koon Circle

A-REIT to enhance portfolio with proposed acquisitions of three properties totalling S$228.5 million. See related reports:
Press Release
Presentation Slides

Key Points
  • S&P Agreement to acquire DBS Asia Hub at 2 Changi Business Park Crescent in an Interested Party Transaction ("IPT") for S$116.0 million ("DBS Asia Hub").
  • S&P Agreement to acquire 31 Joo Koon Circle along Jalan Ahmad Ibrahim, near the intersection of Pan Island Expressway and Ayer Rajah Expressway for S$15.0 million ("31 Joo Koon Circle").
  • MOU for the purchase of a property under development in Jurong for S$97.5 million. This property will only be acquired upon its completion which is expected to be in 2011/2012.
  • The annualised pro forma financial effect of the Acquisitions on the DPU for the financial year ended 31 March 2009 would be an additional 0.054 cents per unit.
  • The Manager intends to finance the Acquisitions with the proceeds from the August 2009 private placement of 185,000,000 new units in A-REIT (the "Private Placement"). S$131 million of the net proceeds (which
    is equivalent to approximately 44.3% of the net proceeds of the Private Placement) will be used to finance the Acquisitions.
Key Points for Acquisition of DBS Asia Hub

  • Purchase price : S$116 million.
  • DBS Asia Hub is a built-to-suit facility for DBS Bank by Ascendas (Tuas) Pte Ltd.
  • Strategically located at Changi Business Park.
  • The property is leased to DBS for 10 years and 1 month with annual rental escalation and an option to renew for another 3 terms of 3 years each.
  • DBS can exercise a conditional option for the landlord to construct Phase 2 of DBS Asia Hub.
Key Points for Acquisition of 31 Joo Koon Circle
  • Purchase price : S$15 million.
  • The property enjoys a prominent frontage along Jalan Ahmand Ibrahim and is in close proximity to the Joo Koon MRT station.
  • Upon completion of this sale and purchase agreement, Flextronics Manufacturing (Singapore) Pte Ltd ("FMS") will lease the property for 5 years with annual rental escalation and an option to renew for another 3 terms of 2 years each.

     


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