ESR-REIT proposes to buy Tuas South property for S$111 mln

ESR REIT said its trustee RBC Investor Services Trust Singapore proposed to acquire a Tuas South property at an estimated cost of S$111 million from water treatment specialist Hyflux.

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ESR Real Estate Investment Trust (REIT) said its trustee RBC Investor Services Trust Singapore proposes to acquire a Tuas South property at an estimated cost of S$111 million from water treatment specialist Hyflux.

The property comprises of five detached factories, one block of 8-storey warehouse and four blocks of dormitory buildings and is located near to Tuas Biomedical Park, the company said in a statement on Wednesday.

"This transaction will not only reinforce our presence and boost our market share in the industrial real estate sector, but will also demonstrate our capability in recycling capital from our divestments into assets in order to unlock greater value," said Adrian Chui, CEO of the Manager.

The long leaseback with Hyflux is expected to provide income stability and increase ESRREIT's portfolio weighted lease expiry from 3.4 years to 4.2 years, the company said.

Hyflux focuses on the areas of water and energy, and a global leader in sustainable solutions ranking among the top desalination plant providers.

The manager intends to finance the total acquisition cost through debt financing. The proportion and mode of financing will be determined closer to completion.

Shares in ESR-REIT fell 0.8 percent to S$0.57 on the Singapore Exchange. The stock has gained 7 percent so far this year.

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