SINGAPORE (Apr 3): Ascendas REIT (AREIT) is selling its property on 30 Old Toh Tuck Road to Soon Bee Huat Trading for $24 million.

The property is a five-storey ramp-up logistics building with a gross floor area of 16,353 sqm and an occupancy of 86.1%. At about 19 years old, the property has a remaining lease of about 39 years.

This divestment, which is expected to be completed by 2Q18, is in line with the manager’s proactive asset management strategy to improve the quality of the REIT’s portfolio and optimise returns for unitholders.

In a Tuesday filing, AREIT says that the proceeds may be recycled to fund committed investments, repay existing indebtedness, extend loans to subsidiaries, and/or fund general corporate and working capital needs.

The sale consideration is 22.4% higher than the original purchase price of $19.6 million and 18.2% higher than the market valuation of the property of $20.3 million.

Assuming that the divestment was completed on Apr 1, the proforma impact on the REIT’s net property income for the fiscal year ended March 2017 would have been a reduction of about $0.69 million, with no material impact on the distribution per unit (DPU).

The net proceeds after divestment costs are estimated to be $22.9 million.

Following this divestment, the REIT will have in its portfolio 99 properties in Singapore and 31 properties in Australia.

Units in AREIT closed 2 cents lower at $2.64 on Tuesday.