Singapore-listed Ascendas REIT has purchased a 25% stake in Singapore’s Galaxis building from a subsidiary of Japan’s Mitsui & Co for S$102.91m (US$72.4m), reflecting a net income property yield of 6.2%.
The 17-storey property is located at the heart of the Fusionopolis complex in one-north business park, Singapore’s hub for ICT, media, physical sciences and engineering industries.
Galaxis (image: Ascendas REIT)
A subsidiary of CapitaLand, the sponsor of Ascendas REIT, owns the remaining 75% stake in Galaxis.
“Galaxis, which also hosts highly reputed tenants, fits well with our strategy to invest in well-located and high-quality business park properties in Singapore and will strengthen Ascendas Reit’s overall portfolio,” said William Tay, CEO of the manager of Ascendas REIT.
Located at 1 and 3 Fusionopolis Place, Galaxis offers 60,752 sq.m. of net lettable area, including a two-storey retail podium.
The property is 99.6% let, with tenants including Canon, Oracle, and Sea (formerly Garena), and has a weighted average lease expiry of 2.5 years.
It has direct access to one-north MRT station and is a 15-minute drive to Singapore’s CBD.
The deal values the asset at S$630m, which was 3.1% lower than its March, 2020.
“The acquisition of the 25% stake in Galaxis is accretive to Ascendas Reit’s distribution per Unit and is transacted at an attractive net property income yield of 6.2% considering the allowable 30% White Component for the site,” Tay said.
The deal follows a number of big trades in the city-state, including Keppel REIT’s US$396m disposal of Bugis Junction Towers.
German Commerz Real also offloaded its 71 Robinson Road office for US$476m last year, while Allianz Real Estate and Gaw Capital snapped up the DUO complex for US$1.17bn.
Ascendas REIT has S$12.8bn in assets under management, with properties in Singapore, Australia, the UK and the US.