BT : Soilbuild divests logistics warehouse for $60m

Business Times - 19 Aug 2010

Soilbuild divests logistics warehouse for $60m

By YEN PEI WEN

SOILBUILD Group Holdings is divesting Penjuru Logistics Hub, a five-storey purpose-built logistics warehouse, for $60 million.

The integrated boutique developer is expecting to recognise a gain of about $16.3 million from the sale of the property at 34 Penjuru Lane, which has a remaining lease of 22 years.

The warehouse, which has 0.4 million square feet of business space, will be leased back to Soilbuild for five years at about $5 million per year.

'As at end-June 2010, Penjuru Logistics Hub had been leased to a range of logistics support businesses, including those for petrochemical and maritime companies located at Jurong Island and Jurong Port respectively,' said Soilbuild.

Soilbuild executive director Low Soon Sim said: 'This divestment is part of our capital management strategy to enhance yields and returns for our growing business space portfolio held for lease.'

The proposed transaction, which needs the approval of the JTC, involved Soilbuild's subsidiary, SB (Lakeside) Investment, signing a put and call option agreement with Sabana Investment Partners.

Soilbuild said that the group's stronger balance sheet and lower gearing allow it to tap into new opportunities to optimise its portfolio mix for better yields.

It is expecting two ongoing developments to yield 1.6 million square feet of business space when they come onstream next year, bringing Soilbuild's total space of business properties for lease to 3.01 million square feet.

For the second quarter of this year, Soilbuild's net profit was $32.7 million, up 66 per cent from a year earlier, in spite of a 24 per cent fall in revenue to $73.6 million. This was helped by fair value gains of $16 million.

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