SINGAPORE (May 31): George Wang, chairman of AIMS APAC Real Estate Investment Trust’s (AA REIT) manager and AIMS and now the REIT’s largest unitholder, is aware of the negative aspect of REITs acquiring assets to raise assets under management just to increase fee income for its sponsors.
However, in a meeting with The Edge Singapore last year, Wang said his REIT could not keep buying properties and had articulated that the best way to raise the REIT’s valuation and cash flow was through redevelopment.
In a recent property tour of four properties, The Edge Singapore saw first-hand how AA REIT is putting this strategy into action. One way is to plug into Singapore’s Future Economy, the city state’s long-term plan to stay competitive.
Take NorthTech, a hi-tech building at 29 Woodlands Industrial Park E1. It is largely occupied by one tenant, a life science company. The company is a global leader in genomics and applies innovative technologies to the analysis of genetic variation and function.
The second example is the Beyonics building where the company provides an integrated range of design, production, engineering and fulfilment solutions to its clients. Here, security and secrecy were so tight that visitors could only gaze at the building from across the road.
Next on the visit was 3 Tuas Avenue 2, which is under development. Unlike Beyonics, 3 Tuas Avenue 2 is a speculative build. The property had a single tenant, which vacated. But instead of leaving the property empty, the manager decided to rebuild it as a ramp-up logistics warehouse.
The last property — and the largest — on the tour was 20 Gul Way. At one point, its anchor tenant was CWT, a unit of CWT International. But on April 16, the latter failed to pay accrued interests and certain fees to its lenders, causing a default.
What is AA REIT manager's other strategy? To find out login in here to read AIMS APAC REIT focuses on AEIs to drive DPU, announces modest acquisition which appears in The Edge Singapore (Issue 884, week of June 3) that is on sale now. Or subscribe here