[SINGAPORE] CapitaLand Ascendas Real Estate Investment Trust (Clar) has entered conditional agreements to acquire two prime properties to expand its portfolio in Singapore, particularly in the technology sector, the manager said on Wednesday (May 28).
The two properties are a Tier III colocation data centre at 9 Tai Seng Drive and a premium business space property at 5 Science Park Drive.
With a purchase consideration of around S$700.2 million, the proposed acquisitions will raise the value of Clar’s Singapore portfolio by 6.6 per cent to around S$11.7 billion. The Singapore portfolio will account for 67 per cent of its total assets under management (AUM) of S$17.6 billion.
William Tay, executive director and chief executive officer of the manager, said that the properties are leased to reputable and well-established end users and tenants in the digital, e-commerce and financial services industries, to steer Clar’s portfolio towards the technology sector.
“This aligns with Clar’s strategy to leverage on global growth trends in technological advancement and digital transformation, while diversifying and strengthening its customer base,” he noted.
The proposed acquisition of the data centre will raise Clar’s data centre AUM by 32.8 per cent to around S$1.9 billion – of which 54 per cent or S$1 billion will be in Singapore, while 46 per cent or S$900 million will be in the UK and Europe.
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The property is located in the Tai Seng Industrial Estate. The manager noted that it was a strategic location for cloud service providers, enterprises and data centre players given its power availability and dense concentration of networks and direct connections to leading network service providers.
Two of Clar’s data centre properties, Kim Chuan Telecommunications Complex and 38A Kim Chuan Road, are located there as well.
Meanwhile, the proposed acquisition of the business space at Science Park Drive will strengthen Clar’s market leadership in the Singapore Business Space and Life Sciences segment, the manager added. The deal will increase the segment’s total AUM in Singapore by 4.8 per cent to around S$5.7 billion.
The manager noted that 5 Science Park Drive is part of the “Geneo” life sciences and innovation cluster in Singapore Science Park 1 – a key technology and research and development hub – adding that the proposed acquisition solidifies Clar’s footprint in the cluster.
The trust owns a 34 per cent stake in another property situated within Singapore Science Park 1, the recently redeveloped 1 Science Park Drive.
The acquisitions are expected to cost around S$724.6 million in total, comprising the purchase consideration, the total acquisition fee payable to the manager, and estimated professional and other fees.
They will be partly funded by a proposed private placement of new units, with an issue price range of between S$2.465 and S$2.515 apiece, which aims to raise gross proceeds of at least S$500 million.
The manager called for a trading halt on Wednesday morning. The counter ended Tuesday 0.4 per cent or S$0.01 higher at S$2.61.
