The manager of ARA LOGOS Logistics Trust (ALOG) says it has divested ALOG Changi DistriCentre 2, through a sale and purchase agreement with PGI Holdings, for a consideration of $16.7 million.

The consideration is said to be around 7.7% above the valuation of the property, which was valued by CBRE at $15.5 million as at Dec 31, 2020.

The property was completed in 1998 and was part of ALOG’s initial public offering (IPO) portfolio. It comprises a three-storey cargo lift warehouse facility with an adjoining four-storey office block with a total gross floor area (GFA) of 111,359 sq ft.

Completion of the sale of the property is subject to approval by JTC Corporation.

SEE:Rising logistics demand keeps ARA Logos Logistics Trust a 'buy': RHB

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The divestment is said to be in line with ALOG’s proactive asset management strategy, which includes the selective disposal of low-yielding and lesser-performing properties with limited potential.

The capital from the divestment will go into improving the trust’s financial flexibility and building a “more resilient and quality portfolio”.

“This proposed divestment of ALOG Changi DistriCentre 2 will allow ALOG to unlock and redeploy capital into other higher-performing assets and achieve operational efficiencies. We are committed to continue our efforts to bring more sustainable value for our unitholders by building a stronger and more defensive portfolio over time,” says Karen Lee, CEO of the manager.

The divestment is expected to be completed by 1HFY2021, or as soon as it receives the approval from JTC Corporation.

Units in ALOG closed 0.5 cent higher or 0.7% up at 74.5 cents on April 22.