ESR Real Estate Investment Trust (REIT) on Thursday said it acquired an 80 percent stake in a special purpose vehicle that owns a leasehold interest in 7000 Ang Mo Kio Avenue 5 property in Singapore for S$240 million.
This transaction is the largest acquisition by ESR-REIT to date and follows the recent acquisition of 8 Tuas South Lane from Hyflux Membrane for S$111 million.
The property is a high-specifications building located within an established industrial estate in the north-eastern part of Singapore and has an independent valuation of S$303.0 million , the company said in a regulatory filing.
The two acquisitions will boost ESR-REIT's portfolio value by 31.4%, increasing from S$1.33 billion to S$1.75 billion.
The transaction is part of ESR-REIT's on-going efforts to rejuvenate its portfolio, by recycling capital released from divestments of lower yielding non-core assets to scalable and value-adding acquisitions which will benefit unitholders in the long term, the company said.
The acquisition was funded with internal cash resources, existing bank debt facilities and part of the proceeds from ESR-REIT's subordinated perpetual securities.
Shares in ESR-REIT were unchanged at S$0.56 on the Singapore Exchange. The stock has gained 12 percent in an year.