ESR-REIT JV to buy logistics property for $225m

The site will serve as Poh Tiong Choon Logistics’ corporate headquarters.

The trustee of ESR REIT has entered into a joint venture (JV), through a limited liability partnership in Singapore known as PTC Logistics Hub LLP, with Poh Tiong Choon Logistics (PTC) to purchase a property at 48 Pandan Road for $225m, an announcement revealed.

A newly redeveloped 6-storey ramp-up warehouse with rooftop parking, the 1.09 million sqft property obtained its Certificate of Statutory Completion, and houses an ancillary dormitory, a temporary ancillary canteen and an ancillary office which serves as PTC’s corporate headquarters.

The purchase consideration of $225m will reportedly be funded through a $40.2m contribution by PTC, a $38.6m contribution by the trustee, and debt of approximately $146.2m to be taken out by the LLP. In connection with the Proposed Acquisition, the total acquisition cost attributable to ESR-REIT is $44.4m.

On completion of the proposed acquisition, the property shall be leased back by the LLP as landlord to PTC as tenant for a term of 10 years with fixed rental escalation per annum, ESR-REIT said.

“The addition of the property enhances the quality of ESR-REIT’s logistics portfolio to comprise four in-demand and modern ramp-up logistics properties, representing 60% of ESR-REIT’s logistics portfolio. Rental income from the logistics portfolio will also increase from 19.7%3 to 22.3% following the proposed acquisition,” ESR-REIT noted in its filing with the Singapore Exchange (SGX).

The proposed acquisition would also increase ESR-REIT’s portfolio weighted average lease expiry (WALE) from 3.7 years to 3.9 years, and improve the lease expiry concentration for 2024 and beyond from 25.6% to 28.2%. Overall portfolio occupancy would also improve from 92% to 92.6%, above the JTC average of 89.3%.

ESR-REIT and PTC have each made an initial capital contribution to the LLP of $1 in cash. ESR-REIT currently holds 49% of the partnership interests in the LLP whilst PTC holds the remaining 51%.

Also Read

One Sophia sells 30% of units at weekend launch

SLA launches tender to revitalise Tanjong Katong Complex

Since you're here...

...there are many ways you can work with us to advertise your company and connect to your customers. Our team can help you dight and create an advertising campaign, in print and digital, on this website and in print magazine.

We can also organize a real life or digital event for you and find thought leader speakers as well as industry leaders, who could be your potential partners, to join the event. We also run some awards programmes which give you an opportunity to be recognized for your achievements during the year and you can join this as a participant or a sponsor.

Let us help you drive your business forward with a good partnership!

I want to download the media kit