The manager of Mapletree Logistics Trust (MLT) has proposed to divest 3 Changi South Lane for $22 million. The proposed sale price represents a 39.2% premium to the property’s latest valuation of $15.8 million as at Oct 1.
On Dec 27, the REIT’s trustee, HSBC Institutional Trust Services (Singapore) Limited, entered into a purchase agreement with Nova Furnishing Holdings Pte. Ltd. for the proposed divestment of the property.
JTC Corporation has given its in-principle approval for the transaction should the parties comply with the stipulated conditions.
3 Changi South Lane is a 23-year-old cargo lift warehouse. The property has a gross floor area of 11,315 sqm (121793.65 sq ft) on a land site of 8,023 sqm.
According to MLT, the property’s outdated warehouse specifications means that it is no longer suitable nor efficient to meet today’s logistics users’ requirements.
There is also limited potential for redevelopment into a modern, ramp-up logistics facility due to its small land area, the REIT manager adds.
The proposed divestment is said to be in line with the manager’s rejuvenation strategy. The capital raised will improve the REIT’s financial flexibility to pursue investment opportunities with higher yield or higher growth potential, says the REIT manager.
Any divestment gains from the transaction will be distributed to MLT’s unitholders. The capital released may be used to fund committed investments and, or reduce debt.
The proposed divestment is expected to be completed by the 4QFY2022/2023.
Following its completion, MLT will have 185 properties in its portfolio.
Units in MLT closed 2 cents higher or 1.28% up at $1.58 on Dec 27.