MapleTree Logistics said it has acquired 44 and 46 Changi South Street 1 for S$16.8 million from JEP Precision Engineering.
JEP Precision Engineering is a local sub-contractor in the aerospace industry, specialising in machining aircraft engine components.
JEP will lease back the property for a period of seven years with an option to extend for a further term of seven years.
MapleTree can also increase rentals by 3.75 per cent at the beginning of years 3, 5 and 7.
The acquisition provides an initial net property yield of 8.7 per cent and the land lease has a balance of 26 years.
Chief Executive Officer of MapleTree Logisitics Trust Management, Richard Lai said that working with JEP will allow the Trust to gain a foothold into the fast-growing aviation and aerospace supply-chain industry.
Mr Lai also added that the Trust believes this sector in the logistics real-estate industry is poised to expand in tandem with the growth of aviation and aerospace businesses.
With the addition of this Property, the Trust said its total portfolio will increase to 95 properties and its total book value will swell to more than S$3.4 billion.
The acquisition is subject to approval by JTC and is expected to be completed by December.
Source : Channel NewsAsia – 3 Dec 2010