SINGAPORE (July 18): A master tenant has been secured for its property at 3 Tuas Avenue 2, says the manager of AIMS APAC REIT (AA REIT), and it will be occupy the entire premises of about 268,000 sf.

The tenant has also committed to a 10-year master lease on a triple net lease basis, with rental escalations every two years during the initial term and options to renew the lease for up to a further 20 years after the expiry of the initial 10-year term.

Without disclosing its name, AA REIT's manager says the tenant is a global medical device company headquartered in the US.

The property is currently undergoing redevelopment into a modern and versatile ramp-up industrial facility suitable for production and storage.

It was initially scheduled for completion in 1H19 but this was delayed It t 1H20 due to redesigning of the property’s base-build to cater to the master tenant’s operational requirements.

However, AA REIT's manager says the redesign will not have a material impact on the overall redevelopment cost of the property.

The project development cost is estimated to be $48.2 million and the property’s value on an “as-if-completed” basis is $51.8 million. The property is expected to give an initial net property income yield of about 7.3%.

See: AA REIT to transform Tuas property into modern industrial facility for $48 mil

Koh Wee Lih, CEO of the manager, says, “The manager constantly looks for ways to optimise and strengthen AA REIT’s portfolio to ensure we can achieve long-term value creation for AA REIT’s Unitholders and build a high quality portfolio capable of evolving to meet the changing market and tenant needs.”

Units in AA REIT closed at $1.46 on Thursday.