Ascendas Real Estate Investment Trust (Ascendas Reit), Singapore’s first and largest listed commercial and industrial REIT, will acquire the remaining 75% stake in Ascendas Fusion 5 Pte Ltd, the holding entity for business park Galaxis for S$534.4 million ($400 million).
Ascendas Reit had acquired the initial 25% interest in Galaxis in March 2020.
It will finance the new acquisition through a combination of debt financing, an issue of consideration units to the vendor, and an equity fundraising, Ascendas Funds Management, the manager of Ascendas Reit, said in a statement on Tuesday.
The proposed purchase “will enlarge the business and science park portfolio in Singapore by 18% to S$4.9 billion and increase the number of properties we have in the vibrant one-north business park to five,” said William Tay, executive director and CEO of Ascendas Funds Management.
Galaxis is located in the heart of one-north, a business park in Singapore, which houses key growth sectors such as biomedical sciences, information, and communications technologies and media, science and research institutes, as well as startups.
Tenants at the property include Sea Limited, Canon, and Oracle. Galaxis had an occupancy rate of 98.6% as on March 31, 2021.
The REIT manager said Galaxis gave a rare opportunity in long land lease tenure with the remaining time of about 51 years. The full control over the asset will allow better operational and tax efficiency, it added.
Ascendas Reit’s total net lettable area will increase by 8.8% from 689,980 square metre to 750,915 square metre upon completion of the Galaxis acquisition. In total, Ascendas Reit will own 212 properties in Singapore, Australia, the United States and the United Kingdom/Europe.
Its buying spree recently includes a S$904.6 million group of data centres in Europe, two office properties in Australia, and two others in the US.
As on March 31, 2021, Ascendas Reit’s investment properties under management stood at S$15.1 billion.