Ascendas Reit to acquire Philips APAC Centre in Singapore for S$104.8m

ASCENDAS Real Estate Investment Trust (A-Reit) has proposed the acquisition of the Philips Asean Pacific (APAC) Centre in Toa Payoh at 622 Lorong 1 Toa Payoh from Philips Electronics Singapore for S$104.8 million.

A-Reit’s manager said on Thursday (Aug 4) that the proposed deal is “well-aligned” with the Reit’s strategic intention, and will strengthen both its portfolio and customer base. The manager is also targeting to attain a Building and Construction Authority (BCA) Green Mark GoldPlus certification for the property after the completion of the proposed acquisition.

As at Jun 30, 2022, the property, located in 622 Lorong 1 Toa Payoh in Singapore, was leased to 4 tenants; it has an occupancy rate of 95.7 per cent and a long-weighted average lease expiry (WALE) of 4.5 years.

Upon completion of the proposed acquisition, Philips will enter a multi-year leaseback of more than two-thirds of the property’s gross floor area, which spans 37,975 square metres. The property is now its APAC headquarters, with a focus on its healthcare and technology business.

The purchase consideration of S$104.8 million was negotiated on a willing-buyer, willing-seller basis. As at May 31, 2022, the independent market valuation of the property was S$111.5 million.

The manager expects the total acquisition cost to be about S$110.04 million, including stamp duty, professional and other fees and expenses of about S$4.2 million, and the acquisition fee of S$1.048 million payable to the manager.

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The proposed acquisition will be funded by A-Reit through internal resources and/or existing debt facilities.

The pro forma impact on the distribution per unit (DPU) for the financial year Jan 1, 2021 to Dec 31, 2021 is expected to be an improvement of 0.045 Singapore cents, assuming the proposed acquisition was completed on Jan 1, 2021.

William Tay, executive director and chief executive officer of the manager, noted that Singapore remains a key market for A-Reit, accounting for about 60 per cent of total assets under management.

“The acquisition of the APAC Center is a natural addition to the portfolio, strengthening our technology and biomedical customer base, and improving the overall resilience of the portfolio with its high occupancy of 95.7 per cent and long WALE of 4.5 years,” he said.

Once the acquisition is completed, A-Reit will own 229 properties comprising 96 properties in Singapore, 36 in Australia, 48 in the United States and 49 in the United Kingdom and Europe.

The proposed acquisition is slated for completion in the second half of 2022.

Units of A-Reit closed at S$3.02 on Thursday, up S$0.03 or 1 per cent before the announcement.