Ascendas REIT To Buy Philips APAC Center For S$104.8mil
SINGAPORE – Ascendas REIT intends to acquire the Philips APAC Center along 622 Lorong 1 Toa Payoh for S$104.8 million via a sale and leaseback transaction, with the seller Philips Electronics Singapore remaining as the anchor tenant, reported The Edge on Thursday noon (4 August, SGT).
The six-storey commercial property comes with ancillary office space, laboratories, space for research and development (R&D), as well as a warehouse. These have a combined gross floor area (GFA) of 37,975 sq m (about 408,759 sq ft). The asset functions as the Amsterdam-based company’s headquarters for Asia Pacific.
According to an independent market valuation as of 31 May 2022, Philips APAC Center is valued at S$111.5 million.
As of 30 June 2022, the commercial property is leased to four tenants. The building has an occupancy level of 95.7 percent and a long weighted average lease expiry (WALE) of 4.5 years.
Ascendas REIT revealed that before transaction costs are taken into account, the 1st year net property income (NPI) yield of the asset is roughly 7.2 percent, but this falls to 6.8 percent after such are taken into consideration.
“The acquisition of APAC Center is a natural addition to the portfolio, strengthening our technology and biomedical customer base and improving the overall resilience of the portfolio,” said William Tay, Executive Director and Chief Executive of Ascendas REIT’s manager.
He added that Singapore remains a key market for the trust, as the Southeast Asian country accounts for 60 percent of its overall assets under management (AUM).
Upon completion of the proposed purchase, Ascendas REIT will own a total of 229 properties across the globe – 36 in Australia, 48 in the US, 49 in Europe, and 96 in Singapore.
The acquisition of Philips APAC Center, which will be financed by internal resources, is expected to be concluded by H2 2022.