Mapletree Logistics Trust agreed to sell a seven-story warehouse in Singapore to its sponsor, Mapletree Investments Pte. Ltd., for S$68.0 million, subject to certain conditions.
Gains from the divestment of 7 Tai Seng Drive will be distributed to the trust's unit holders, while capital released from the transaction might be used for other investments and/or debt reduction.
The price consideration is 79% higher than the amount that the trust paid for the 20-year-old property in 2006 at S$38.0 million. The price tag is also 114% above the latest valuation of the 23,844-square-meter asset.
Mapletree's asset manager, Mapletree Logistics Trust Management Ltd., decided to sell the property that covers roughly 8,968 square meters of land area after it found that the property has limited potential to be refurbished into a modern logistics facility, given that it has reached its maximum plot ratio for development. The manager also said the sale fits well with its portfolio improvement strategy for the trust.
Completion of the sale, if the sponsor exercises its option to purchase, is expected in the fourth quarter of fiscal year 2017-2018.
As of Aug. 11, US$1 was equivalent to S$1.36.