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SINGAPORE –ESR-LOGOS REIT is still selling the properties it does not need. It just sold a property in Ang Mo Kio for S$33.3 million. This shows that people still want to buy properties in good locations in Singapore.
The property that was sold is in an industrial area in Ang Mo Kio. This area is very old and well connected with a road to the Central Expressway and it is close to the city centre. This is why a lot of medium businesses and logistics companies like to be there. The property was sold to someone who is not related to ESR-LOGOS REIT. They agreed on the price together.
ESR-LOGOS REIT did not say who the buyer is or how more money they got from the sale.. They said they are selling properties that are not important, to them so they can get more value from their other properties. ESR-LOGOS REIT is doing this to manage its properties in a way.
Part of Larger Portfolio Rejuvenation
This is not an isolated move. Over the 18 months ESR-LOGOS REIT, now called ESR-LOGOS REIT (E-LOG) has been changing its portfolio a lot. In 2023 the REIT sold ten properties that were not important for a total of about S$440.6 million. These included places like 49 Pandan Road and 3 Pioneer Sector 3.
The plan is easy to see: sell factories that do not make much money and do not have much chance to be rebuilt. Then use the money to buy better logistics buildings. Also use the money for improvements at places like 7000 Ang Mo Kio Avenue 5 and 7002 Ang Mo Kio Avenue 5. The REIT also wants to reduce the amount of debt it has.
The manager said that the S$33.3 million from selling the Ang Mo Kio properties will be used to pay off some debt. It will also be used to buy properties that can add value. It will help with improvements and, for business needs. This is expected to give the REIT money to work with at a time when it costs more to borrow money.
Market Context
The deal is happening because the Singapore industrial property market is doing well. With problems around the world people still want to rent good industrial space in places like Ang Mo Kio, Tai Seng and Changi. This is because of growth in making things moving goods from one place to another and online shopping.
For ESR-LOGOS REIT, which has different kinds of properties like warehouses high-tech industrial spaces and business parks in Singapore, Australia and Japan selling some properties is a smart move. It helps them keep a portfolio that is ready, for the future and gives value to the people who own parts of ESR-LOGOS REIT in the long run.
Selling this property will not change the value of ESR-LOGOS REITs assets or the amount of money it gives to the people who own parts of it this year.
