Saturday, February 12, 2011

A-Reit buys Shanghai property for 587.9m yuan

ASCENDAS Real Estate Investment Trust (A-Reit) has made its foray into China by buying a business park building in Shanghai for 587.9 million yuan (S$113.8 million).

The industrial Reit will continue looking for more investments in Singapore and beyond, including the major Tier One cities of China.

A-Reit announced its forward purchase in China yesterday, almost three months after it first unveiled plans to venture into the mainland.

The property's location is in the Jinqiao export and processing zone in Pudong New District, with expected gross floor area of around 79,880 square metres.

A-Reit is buying the property from Hyday Holding and the latter's parent Qingjian International (South Pacific) Group Development Co.

The sellers will provide A-Reit with a rental guarantee of 67.6 million yuan upon completion of the deal, which should happen in the second half of next year.

Assuming that A-Reit had held the property for the whole of FY2009/10, the DPU for that period could have been 0.07 cent higher, on an annualised pro forma basis, and after considering applicable taxes in China.

A-Reit plans to market the property through its network of existing tenants, and through its sponsor Ascendas's operating platform in China.

Tan Ser Ping, CEO and executive director of A-Reit's manager, said that A-Reit will continue searching for investment opportunities in Singapore and the region. In China, it will focus on major Tier One cities such as Shanghai.

Even as the Reit expands abroad, its portfolio will comprise largely 'Singapore-based assets in the foreseeable future', he said.

A-Reit lost four cents on the stock market yesterday to close at $2.06.

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