Accretive acquisition of 29 Woodlands Industrial Park E1, NorthTech for S$72.0 million.
Sale of 23 Changi South Ave 2 for $16.7 million, 3.1% above book value.
Sale of Asahi Ohmiya Warehouse, Tokyo Japan for JPY1.49 million, 1.6% above book value.
Well supported private placement, raising gross proceeds of S$43.5 million.
Negotiated three year S$45.0 million acquisition debt facility in February 2011 which provides the Trust with additional financial flexibility.
Revaluation of 25 Singapore properties:
+2.67% vs 30 September 2010 valuations +4.00% vs 31 March 2010 valuations
Portfolio size grew from S$803.9 million to S$853.2 million.
Distribution Timetable DPU: 0.255 cents Ex-date: 26 April 2011, 9.00am Books closure date: 28 April 2011, 5.00pm Distribution payment date: 8 June 2011
AIMS AMP Capital Industrial REIT Management Limited, as manager of AIMS AMP Capital Industrial REIT (“AIMSAMPIREIT”), is pleased to announce that AIMSAMPIREIT’s unaudited financial results for the financial year ended 31 March 2011 will be released on 19 April 2011, after market close.
Singapore’s Aims Amp Capital Industrial Reit (AA Reit) (AART.SI) said it plans to increase the share of business park assets in its portfolio through acquisitions in order to benefit from higher rental income.
The trust, part-owned by Australian institutional real estate fund manager AMP Capital Investors (AMPGCH.UL), also aims to grow its portfolio by about $200 million, its chief executive officer Nicholas McGrath told Reuters in an interview. “We have an increasing bias towards business parks and high-tech space,” said McGrath, a trained lawyer who moved to Singapore six years ago.
“We think rentals are likely to grow faster than in industries where margins may be under pressure and therefore the ability to afford higher rentals is under pressure”.
In the last 15 months, AA Reit bought about $300 million worth of assets and sold its sole Japanese property for 1.49 billion yen in order to focus its business on Singapore.
Currently, it has 26 properties in the city-state worth about $832.9 million and hopes to see business park assets account about 20-30% of its portfolio in about 3 years, McGrath said. They make up about 18% of its portfolio now.
The trust hopes to acquire more industrial properties that cater to higher-end manufacturing or high-technology businesses, as Singapore seeks to move away from low cost manufacturing activities.
“Singapore’s government policy as a whole is to move up the value chain...It is not the low cost manufacturer of products that it once was. Our strategy is very much aligned with where the market is moving,” said McGrath.
He added that he expects demand for business parks to increase faster than that for manufacturing facilities, which currently account for about 22% of AA Reit’s total portfolio.
Although AA Reit is one of the smallest amongst its peers with a market capitalisation of US$358 million ($452 million), it had a high distribution yield of 9.5%. This compares with an average of about 7% for Singapore-listed real estate investment trusts.
AA Reit is also looking at redeveloping and enhancing several of its warehouses, logistic and manufacturing facilities as they currently have underutilized plot ratios.
This would help the reit to boost its gross floor area and rental income, McGrath said.
AA Reit is also exploring acquiring properties in China or Australia, where its sponsors AMP Capital and AIMS Financial Group already have a presence.
“Over the next several years, call it a 5-year plan, we can be a reit that is well-diversified, not only across different asset classes within the general moniker of industrial, but also well diversified geographically,” McGrath said.
However, the trust has no immediate plans to buy assets in overseas markets due to the relatively high interest rates and low yields in Chinese and Australian markets, McGrath said.
Further to the previous announcements made by AIMS AMP Capital Industrial REIT Management Limited (the “Manager”) as Manager of AIMS AMP Capital Industrial REIT (‘Trust”), the Manager wishes to announce that the sale of the Trust’s effective 99.2% interest of the Property has been completed today.
A joint inspection of the Property by the purchaser, the Trust’s Japan asset manager and an independent engineer indicated JPY6.9 million (SGD107,619.45)1 of repairs were required on the Property following the earthquake.
Accordingly, the sale price has effectively been reduced from JPY1.49 billion to JPY1.483 billion. The net sales proceeds will be used to repay debt, reducing the aggregate leverage of the Trust to approximately 32.0%.
• Private Placement to raise minimum gross proceeds of S$43.5 million • New Units to be offered at between S$0.1976 and S$0.2041 per New Unit • Proceeds from the Private Placement to be used to fund the acquisition of a property located at 29 Woodlands Industrial Park E1, Singapore 757716 (“NorthTech” (the “Acquisition”))
Overview of Acquisition NorthTech is a four-storey high technology light industrial building with basement car park located in the northern part of Singapore at the corner of Admiralty Road West and Woodlands Avenue 8 and is easily accessible by the Seletar Expressway and the Admiralty MRT Station. Surrounding developments are predominantly industrial in nature, comprising purpose-built factories and ramp-up and terrace factories. The property is primarily used for office and warehouse and has an occupancy rate of 98.3% as at 1 January 2011 with a total gross rental of S$1.8 million from 1 October 2010 to 31 December 2010. NorthTech is a multi-tenancy building and a majority of the tenants are in the engineering and technology sector,for example, Broadcom, Nikon Precision and Schmidt Electronics.
Title: URA leasehold estate with a remaining land tenure of approximately 44.0 years Land area: 197,691 square feet (“sq ft”) Net lettable area: 390,130 sq ft Gross floor area: 489,560 sq ft
Merits of the Acquisition and Private Placement
(i) Acquisition of a High Quality Asset NorthTech has a weighted average lease expiry of 3.5 years as at 31 December 2010. The initial net property income yield (“NPI Yield”) for NorthTech is 7.6%. This compares favourably with the NPI yield of AIMSAMPIREIT’s current portfolio of 7.2%.
(ii) AIMSAMPIREIT will have readily available financing to capitalise on growth opportunities. With the proposed Acquisition, AIMSAMPIREIT was able to secure the Acquisition Loan Facility from SCB. Upon completion of the Acquisition and the sale of 23 Changi South Avenue 2 (“KTL”), based on the Minimum Issue Price, AIMSAMPIREIT will have a total of S$37.6 million in undrawn debt facilities. Following the completion of the Acquisition and the sale of KTL, AIMSAMPIREIT’s Aggregate Leverage is expected to be 33.6%, which is below the maximum Aggregate Leverage of up to 60.0% permitted by the Monetary Authority of Singapore (the “MAS”) for real estate investment trusts in Singapore.
(iii) Possible increase in trading liquidity of Units. The New Units to be issued pursuant to the Private Placement will increase the number of Units in issue by 219,989,907 Units, which is an increase of 11.1% of the total number of Units in issue as at 31 December 2010.
Advanced Distribution AIMSAMPIREIT’s policy is to distribute its distributable income on a quarterly basis to Unitholders.
In connection with the Private Placement, the Manager however intends to declare in respect of the Units in issue immediately prior to the issue of the New Units (“Existing Units”), a distribution of the distributable income of AIMSAMPIREIT for the period from 1 January 2011 to the day immediately prior to the date the New Units are issued pursuant to the Private Placement (the “Advanced Distribution”).
The next distribution thereafter will comprise AIMSAMPIREIT’s distributable income for the period from the day the New Units are issued pursuant to the Private Placement to 31 March 2011. Quarterly distributions will resume thereafter.
The Advanced Distribution is intended to ensure that the distributable income of AIMSAMPIREIT accrued up to the day immediately preceding the date of issue of the New Units (which at this point, will be entirely attributable to the Existing Units) is only distributed in respect of the Existing Units, and is being proposed as a means to ensure fairness to holders of the Existing Units.
The current expectation of the Manager is that the quantum of the distribution per Unit (“DPU”) under the Advanced Distribution will be approximately 0.285 cents per Unit, estimated based on actual revenue and expenses for the three months ended 31 December 2010. The actual quantum of the DPU under the Advanced Distribution will be announced on a later date after the management accounts of AIMSAMPIREIT for the relevant period have been finalised.
Stable DPU performance: 0.51 cents, translating to annualised DPU yield of 9.5%
Strong increase in gross revenue of 56.0% y-o-y, 16.6% q-o-q
Net property income increased by 47.1% y-o-y, 20.7% q-o-q
Well supported rights issue was 1.3 times subscribed, raising gross proceeds of S$79.6 million
Portfolio grew from S$640.1 million to S$803.9 million with the acquisition of 27 Penjuru Lane
Refinanced the S$175.0 million facility at an improved interest margin of 2.16% compared to 3.5% previously. Average debt maturity increased to 3.7 years.
Sale of 23 Changi South Avenue 2 for S$16.7 million, 3.1% above book value
Distribution Timetable DPU: 0.51 cents Ex-date: 31 January 2011, 9.00am Books closure date: 2 February 2011, 5.00pm Distribution payment date: 15 March 2011
Key Financial Metrics Appraised Value of Property Portfolio: S$803.9 million (2nd Q S$640.1 million) Market Capitalisation: S$427.2 million (2nd Q S$447.1 million) NAV per Unit: S$0.27 (2nd Q S$0.31) Discount to NAV: 19.5% (2nd Q 27.4%) Aggregate Leverage: 34.0% (2nd Q 28.9%) Interest Cover Ratio: 5.0 times (2nd Q 4.4 times) Weighted Average Debt Maturity: 3.7 years (2nd Q 2.2 years)
AIMS AMP Capital Industrial REIT Management Limited, as manager of AIMS AMP Capital Industrial REIT (“AIMSAMPIREIT”), is pleased to announce that AIMSAMPIREIT’s unaudited financial results for third quarter ended 31 December 2010 will be released on 25 January 2011, after market close.
- Sale of 23 Changi South Avenue 2 Singapore above book value - Signing of three long term leases with high quality tenant at 23 Tai Seng Drive Singapore - 100% occupancy achieved at 15 Tai Seng Drive Singapore
Sale of 23 Changi South Avenue 2 Singapore (“Property”) On 3 November 2010 the Manager announced that it had issued an option (“Option”) to Premier Land (East) Pte Ltd (“Purchaser”) for the sale of the Property for S$16.7 million following the payment by the Purchaser of a 1% non refundable option fee of S$167,000. The sale price is S$500,000 above the book value of the Property of S$16.2 million as at 30 September 2010. The Manager is pleased to announce that the Purchaser exercised the Option on 15 November 2010 and has paid S$1.5 million, equivalent to 9.0% of the sale price. The balance of the sale price will be paid in cash on completion of the sale, which is expected to take place in January 2011.
The sale of the Property is consistent with the Manager’s strategy of recycling the Trust’s capital to maximise returns for unitholders. The Manager adopts a proactive approach towards managing the Trust’s properties with a view to enhancing their quality and value. This includes identifying properties within the Trust’s portfolio which have reached the optimal stage of their life cycle for divestment, allowing the Manager to free up capital to provide the Trust with greater financial flexibility for future investment opportunities.
Signing of three long term leases with high quality tenant at 23 Tai Seng Drive Singapore The Manager is pleased to announce that it has recently signed three long term leases at market rents with T-Systems Singapore Pte Ltd (“T-Systems”), a Deutsche Telecom Group Company, at 23 Tai Seng Drive Singapore. 23 Tai Seng Drive is one of the Trust’s five multi tenancy properties and has a total net lettable area of 92,150 sqft. The signing of these leases with T-Systems is consistent with the Manager’s asset management strategy of securing high quality tenants with long lease terms which increase the weighted average lease expiry (“WALE”) profile of the Trust’s portfolio. The WALE of the Trust’s portfolio is currently 3.9 years.
T-Systems has signed two leases over levels one, three and four of the building which span reception, office, warehouse and data centre areas which in aggregate represent a total of 51,158 sqft or 56% of the net lettable area of the property. The leases end on 31 July 2020 with an option to renew for a further five years. The leases are subject to a rent review in January 2013 with fixed rental escalations every two years after that.
In addition, T-Systems has signed a five year lease (with a five year option) over level two of the building representing 8,176 sqft or a further 9% of the net lettable area of the property. In total, T Systems now occupies over 64% of the property. The occupancy of the property is 100%.
100% occupancy achieved at 15 Tai Seng Drive Singapore 15 Tai Seng Drive is another one of the Trust’s multi tenancy properties. The property, which has a total net lettable area of 192,000 sqft, had occupancy of 85% as at 31 March 2010. The Manager has recently achieved occupancy of 100% at the property after securing lease renewals with existing tenants as well as new leases over previously unoccupied space. The total occupancy of the Trust’s portfolio is currently in excess of 98%, which compares favourably to the Singapore industrial average of 92.5%.
AAC recorded 2Q2011 revenue of $16.8 million ( +42.1% YOY), net property income of $12 million ( +3% YOY) and distributable income available to unitholders of $8.3 million (+55.2% YOY). AAC will payout 97.5% of distributable income, and DPU for the quarter was 0.3968 cents (-79% YOY). In 4Q2010, when AAC added properties to its portfolio. Results exclude contribution from the October acquisition ; so, we expect subsequent quarters to show improvement. We forecast 2H2011E DPU to 1.785 cents, or a yield of 8%. We revise up our price target slightly to 24 cents derived from a DDM model.
Book value as at 30 September 2010: S$16.2 million
Sale expected to complete in January 2011
Provides opportunity for future investment opportunities
In the interim, net sale proceeds will be used to repay debt under the Trust’s newly established revolving credit facility, reducing aggregate leverage to approximately 33.4% from approximately 34.8%
Continued execution of Manager’s strategy to maximise returns for unitholders
AIMS AMP Capital Industrial REIT Management Limited, the manager (the "Manager") of AIMS AMP Capital Industrial REIT (the "Trust") wishes to announce that HSBC Institutional Trust Services (Singapore) Limited, in its capacity as trustee of AIMSAMPIREIT (the "Trustee"), has today issued an option (the "Option") to Premier Land (East) Pte. Ltd. (the "Purchaser") for the sale (“Sale”) of 23 Changi South Avenue 2 486443 begin_of_the_skype_highlighting2 486443end_of_the_skype_highlighting (“Property”) for a consideration of S$16.7 million (the "Sale Consideration").
The book value of the Property is S$16.2 million based on an independent appraisal by CBRE as at 30 September 2010.
Principal terms of the Sale The Purchaser has today paid to the Trust S$167,000, equivalent to 1.0% of the Sale Consideration, as a non refundable option fee. The Purchaser will pay S$1.5 million, equivalent to 9.0% of the Sale Consideration, on exercise of the Option on or before 16 November 2010. The balance of the Sale Consideration will be paid in cash on completion of the Sale, which is expected to take place in January 2011.The completion of the Sale is conditional upon, among others, the approval of JTC Corporation to the Sale.
Rationale for the Sale The Sale is consistent with the Manager’s strategy of recycling the Trust’s capital to maximise returns for unitholders. The Manager adopts a proactive approach towards managing the Trust’s properties with a view to enhancing their quality and value. The approach includes identifying properties within the Trust’s portfolio which have reached the optimal stage of their life cycle for divestment. This allows the Manager to free up capital to provide the Trust with greater financial flexibility for future investment opportunities.
Use of Sale proceeds The Sale proceeds, net of sale related costs, will be used to repay debt under the Trust’s newly established revolving credit facility, reducing aggregate leverage to approximately 33.4% from approximately 34.8%. This increased headroom will provide the Trust with greater financial flexibility for future investment opportunities.
AIMS AMP Capital Industrial REIT Management Limited, as manager of AIMS AMP Capital Industrial REIT (“AIMSAMPIREIT”), is pleased to announce that AIMSAMPIREIT’s unaudited financial results for second quarter ended 30 September 2010 will be released on 29 October 2010, after market close.
Funds raised to buy warehouse and logistics facility
AIMS AMP Capital Industrial REIT (AIMSAMPIREIT) is looking to acquire a ramp-up warehouse and logistics facility for $161 million, which will be partially funded through a rights issue.
It has proposed to acquire C&P Logistics Hub 2 – located at 27 Penjuru Lane – from DB International Trust (Singapore) Limited, which is the trustee of AMP Capital Business Space REIT.
As AMP Capital Business Space REIT is indirectly wholly-owned by AMP Capital Holdings, who is the sponsor and a controlling unitholder of AIMSAMPIREIT, the acquisition is considered to be a related party transaction.
The total cost of the acquisition is $163.1 million, which includes the $161 million purchase consideration, a $1.6 million acquisition fee for AIMSAMPIREIT’s manager AIMS AMP Capital Industrial REIT Management, and about $0.5 million in professional and other fees and expenses.
To help fund the acquision, AIMSAMPIREIT has proposed to issue 513.3 million new units through a fully underwritten and renounceable rights issue on a basis of seven rights units for every 20 existing units at an issue price of $0.155 per unit. The issue price represents a discount of 32.6 per cent to the closing price of $0.23 per unit on 19 August.
This will raise gross proceeds of some $79.6 million, of which $64.5 million will be channelled toward the acquisition.
Its sponsors, AIMS Financial Group and AMP Capital Investors (Luxembourg No. 4) SARL, have agreed to subscribe for their pro rata rights entitlements of 39.28 million and 82.5 million rights units respectively. Six unitholders, including Dragon Pacific Assets Limited and APG Algemene Pensioen Groep NV, have also committed to subscribing for their pro-rata rights entitlements and in some cases, to sub-underwrite a portion of the rights issue.
The warehouse facility, with a net lettable area of 975,823 sq ft, is leased out to C&P Holdings in a master lease that will expire in December 2012. It has a net property income yield of 7.7 per cent. Its annual rental for the rental year ending Dec 11, 2010, is $13 million.
Independent valuations by Colliers International Consultancy & Valuation (Singapore) and CB Richard Ellis put the purchase consideration at $162.5 million and $165 million respectively.
‘From management’s point of view, we think that we’re buying well, in a good part of the cycle. Certainly in our experience, market rents have bottomed, valuations have bottomed,’ said Nicholas McGrath, chief executive officer of AIMS AMP Capital Industrial REIT Management. ‘What we’re seeing now is increases in market rentals across our portfolio, which will translate to increases in valuations in the future.’
The acquisition also provides for the refinancing of the trust’s existing loan on improved terms. While the existing loan has an interest margin of 3.5 per cent, the $280 million new loan will have a weighted average interest margin of 2.16 per cent. The new loan is split into three tranches – a three-year $100 million term loan facility, a three- year $80 million revolving credit facility and a five- year $100 million term loan facility.
Mr McGrath also said that AIMSAMPIREIT will look to grow its presence in Asia in the medium to long term, especially in markets such as Japan and China. In Singapore, it will carry out enhancement works to increase the net lettable area at some of its properties.
It currently has 25 properties in Singapore and one in Japan.
If the acquisition goes through, its portfolio size will increase by 25.3 per cent to nearly $800 million.
The proposed acquisition is subject to unitholders’ approval at an extraordinary general meeting, which will be held on Sep 13.
Singapore’s AIMS AMP Capital Industrial Reit said on Monday it plans to buy a property, which includes a warehouse and logistics facility, in the city-state for $161 million.
The property has an initial net property income yield of 7.7% and AIMS AMP Capital will finance the acquisition from debt and equity, the company said in a statement.
AIMS AMP was formerly known as MacarthurCook Industrial Reit.
