A-Reit buyer of Creative’s HQ building in Singapore Jurong East
By KALPANA RASHIWALA
ASCENDAS Real Estate Investment Trust (A-Reit) has emerged as the buyer of Creative Technology’s headquarters building at 31 International Business Park in Jurong East. The price will be $246.8 million.
On completion of the sale, a subsidiary of Creative Technology will lease the property for five years
Creative said in March that it had agreed to sell and lease back the property but did not disclose the buyer’s identity. The deal is subject to approval by Creative shareholders and JTC Corp.
On completion of the sale, a Creative subsidiary will lease the property for five years, with options to renew for a further three plus two years.
A-Reit’s manager said the average yield for the initial five-year lease will be 6.24 per cent. Additional rent is payable in the third and fifth years of the lease if the cumulative increase in Singapore’s Consumer Price Index exceeds 5 per cent.
Had A-Reit bought, held and operated the property since the start of the current financial year, the proposed acquisition would have boosted its distributable income per unit by 0.07 cent.
A-Reit’s manager will receive a $2.5 million acquisition fee. Other transaction costs are estimated at $3.7 million.
The property, valued by CB Richard Ellis at $246.8 million, is a part five-storey, part seven-storey and part eight-storey tower with basement parking.
It has an auditorium and a 2,000-capacity outdoor amphitheatre and is on a 265,739-sq-ft site with 30 + 30 year leasehold tenure from Dec 16, 1994.
A-Reit plans to fund the acquisition by debt and/or equity. On the stock market yesterday, the counter ended 14 cents lower at $2.50.
Source : Business Times - 10 May 2008
Singapore Property - Buy , Sell , Rent , Invest
Mindy Yong
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mindy@mindyyong.com
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