Cache Logistics Trust has purchased two Singapore properties for about S$39.8 million, said the trust’s manager, ARA-CWT Trust Management.
The properties are a 177,000 square feet two-storey ramp-up warehouse with a mezzanine office in Changi North International Logispark, and a 55,000 square feet single-storey warehouse with an extended two-storey office annex for the storage of chemical and dangerous goods at Penjuru Lane.
The Changi property was acquired for S$30.9 million from regional logistics firm APC Distributors, while the Penjuru Lane property was acquired for S$8.9 million from Kim Heng Tubulars.
The Changi property is currently fully leased out, but APC will lease back one-third of the building upon the completion of the sale.
Two existing tenants will lease the remaining space. One of them, a multi-national electronics manufacturing service provider, will take up about 50 per cent, while the second tenant, a logistics service provider, will utilise 16 per cent.
ARA-CWT said APC has also committed to occupy an additional 27,000 square feet of space when it becomes available in the future.
The average lease expiry for the entire Changi property is about 3.3 years.
As for the Penjuru Lane property, it is located near PSA Terminals, Jurong Port, Tuas Checkpoint and at least half of the container yards in Singapore, said ARA-CWT.
The property will be leased back to Kim Heng Tubulars, a subsidiary of oil and gas logistics firm Kim Heng Group, for three years from the completion of the sale, with an option to extend the lease for a further three years.
ARA-CWT said the lease agreement with Kim Heng Tubulars provides a built-in rental increase of 2 per cent a year.
The property also has a maximum allowable plot ratio of 2.5 over the achieved plot ratio of 0.63, which allows ARA-CWT to redevelop the premises in future.
With the two acquisitions, Cache’s total assets under management will increase to S$783.9 million.
The combined net property income (NPI) yield from the two properties is 8 per cent, said ARA-CWT. This compares with 7.7 per cent for Cache’s existing portfolio.
Both acquisitions will be fully funded through debt and as a result, Cache’s leverage will increase from 23.7 per cent to 27.6 per cent.
The acquisitions are expected to be completed in the first half of this year.
Source : Channel NewsAsia – 15 Mar 2011