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S-REITs' recent divestments a good move amidst lacklustre market: analysts
Proceeds could be used in redevelopment and paring down debt.
Despite the lacklustre outlook on property capital calues, industrial REITs in Singapore still managed to divest some of their non-core assets at decent valuations, OCBC Investment Research said.
One example is Sabana REITs proposed divestment of its Pandan Loop property for $14.8m, which is actuall above its acquisition price of $13.5m and 13.8% above its book value of $13m.
Other REITs which have recently divested their assets include Cambridge Industrial Trust and Ascendas REIT.Cambridge finished the divestment of its 2 UBi View property in October for a total consideration of $10.5m, representing a 6% and 40% premium above the book value and purchase price, respectively.
Meanwhile, Ascendas REIT sold all three of its properties in China at prices above their last valuation.
"We believe proceeds from the divestment of assets would likely be used to pare down debt, fund inorganic growth opportunities and finance AEIs and redevelopment of existing properties. This allows REITs to refresh their portfolios and make themselves more relevant to market requirements," OCBC said.
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