Ascendas REIT to acquire Philips APAC Center at Toa Payoh for $104.8 million

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Philips APAC Centre was redeveloped in 2016 into the high-tech campus for Philips’ ASEAN Pacific headquarters and innovation centre (Photo: Ascendas REIT)

SINGAPORE (EDGEPROP) - Ascendas REIT plans to acquire Philips APAC Center at 622 Lorong 1 Toa Payoh from Philips Electronics Singapore Pte Ltd, for $104.8 million.

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The independent market valuation of the property as of May 31 2022 is $111.5 million.

Philips APAC Centre was redeveloped in 2016 into the high-tech campus for Philips’ ASEAN Pacific headquarters and innovation centre. The six-storey building comprises laboratory, research and development, warehouse and ancillary office space over a gross floor area (GFA) of 37,975 sqm (408,763 sq ft).

Philips, a health technology company listed in Amsterdam and New York, and intends to leaseback more than two-thirds of the property’s GFA. The building will continue to serve as its APAC headquarters.

“We’ve been operating in Singapore for more than 70 years and our commitment to Singapore and the region remains as strong as ever,” said Caroline Clarke, CEO and executive vice president, Philips ASEAN Pacific, in a statement. “The strategic divestments of the Signify and Domestic Appliances businesses were part of our transformation towards becoming a health technology leader, and the next logical step is to change our ownership of the APAC Center to reflect its multi-tenanted nature. This does not change our business operations in any way and Singapore will remain an important market for Philips and a thriving regional hub for our business, innovation and stakeholder collaboration.”

As at 30 June 2022, the property is leased to a total of four tenants, has an occupancy rate of 95.7% and a long WALE of 4.5 years.

According to Ascendas REIT, the first year net property income yield of the acquisition is around 7.2% and 6.8% pre-transaction costs and post-transaction costs respectively.

“The acquisition of APAC Center is a natural addition to the portfolio, strengthening our technology and biomedical customer base and improving the overall resilience of the portfolio with its high occupancy of 95.7% and long WALE [weighted average lease expiry] of 4.5 years,” says William Tay, executive director and CEO of the Ascendas REIT manager.

Upon completion of the proposed acquisition, Ascendas REIT will own 229 properties comprising 96 properties in Singapore, 36 properties in Australia, 48 properties in the United States and 49 properties in Europe.

According to Ascendas REIT, Singapore remains a key market for Ascendas Reit, making up 60% of its total assets under management.

The proposed acquisition is expected to complete in the second half of 2022, and will be funded by internal resources.

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