ESR-REIT acquires 80% of AMK high-specs building for $243.5 mil

SINGAPORE (Dec 14): ESR Funds Manager, the manager of ESR-REIT, is acquiring an 80% stake in 7000 AMK which owns a leasehold interest in 7000 Ang Mo Kio Ave 5 for $243.5 million.

ESR Funds Manager has also been granted a put and call option to purchase the remaining 20% stake in 7000 AMK from seller Ho Lee Properties.

To partially fund the acquisition, the manager plans to sell up to 263 million new units of ESR-REIT.


Exterior of 7000 Ang Mo Kio Avenue 5

(Credit: ESR-REIT)


7000 Ang Mo Kio Ave 5 is a high-specifications building with a gross floor area (GFA) of about 1.07 million sf with a net lettable area (NLA) of about 834,783 sf.

It has a 32-year lease starting on Jan 30, 1995, with an option to renew for a further 30 years.

The property has an occupancy of 91.9%. Tenants include high value-added manufacturers, data centre operators, power and utilities companies and telcos such as Heptagon Micro Optics, SP Services and StarHub.

The property was independently valued at $303 million as at Oct 31.

ESR Funds Manager says the acquisition will raise ESR-REIT's portfolio WALE from 3.42 years to 4.24 years, providing income stability and potential rental upside.

Contribution of the largest tenant to ESR-REIT's portfolio rental income will also decrease to 6.5% from 7.7% with the acquisition.

ESR-REIT's latest acquisition comes on the back of a recent acquisition of 8 Tuas South Lane from Hyflux Membrane Manufacturing, completed on Dec 13.


This story, written by Samantha Chiew for The Edge Singapore, first appeared on Dec 14.

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