[SINGAPORE] The manager of ESR Real Estate Investment Trust (Reit) announced on Wednesday (Sep 30) that it has entered into a sale and purchase agreement to divest its property at 30 Pioneer Road for S$32 million to GKE Corp .
The property is a four-storey warehouse with a seven-storey ancillary office within the Jurong Industrial Estate, and has a gross floor area of 26,114 square metres.
The consideration is in line with its valuation of S$32 million. The divestment is expected to be completed by the fourth quarter of 2026.
The Reit’s manager said that net proceeds will be put towards outstanding loans, potential acquisitions, asset-enhancement initiatives and general working capital requirements.
It added that the divestment is in line with the Reit’s strategy to “enhance its portfolio quality and return profile over time, through recycling capital out of shorter land lease assets in Singapore and redeploying proceeds into asset-enhancement initiatives and accretive acquisition opportunities in its target international markets”.
The divestment is not expected to have a material impact on ESR-Reit’s net asset value and distribution per unit for FY2026.
After the transaction is completion, the Reit’s portfolio will consist of 66 properties in Singapore, Japan and Australia. The Reit also has investments in three property funds in Australia.
In a separate announcement, GKE noted that it is currently “using the property for its business” and is a tenant there.
It said that the deal is aligned with its “ongoing strategy for business expansion”, and would give it “control over the property for the remaining tenure” of its JTC lease, which ends on Feb 15, 2037.
SEE ALSO
This would reduce GKE’s rental obligation and avoid potential relocation costs and disruption to its operations, it added.
Units of ESR-Reit closed 0.5 per cent or S$0.01 lower at S$2.08 on Wednesday, before the divestment was announced. Shares of GKE closed flat at S$0.063.
