DIVESTMENT
During the financial year, the Manager completed its fourth
and fifth divestments. In April 2015, 26 Senoko Way was
divested to JTC Corporation for S$24.8 million and in
September 2015, BBR Building was sold to BBR Holdings (S)
Ltd for S$13.9 million. Total capital gains of S$15.7 million
were realised over the original costs of investments, after
transaction costs.
In April 2016, the Manager also sold Four Acres Singapore
to Unilever Asia Pacific Private Limited for S$34.0 million
realising capital gains of S$0.6 million over the development
cost of the built-to-suit project.
The Manager will continue to selectively divest properties
that have reached a stage which offers limited scope for
further income growth and to recycle capital and optimise
A-REIT’s portfolio.
COMPLETED DIVESTMENTS TO DATE
Sale Price (S$m)*
Completed
6 Pioneer Walk
32.0
Jun-13
Block 5006 Techplace II
38.0
Mar-14
1 Kallang Place
12.6
May-14
26 Senoko Way
24.8
Apr-15
BBR Building
13.9
Sep-15
Four Acres Singapore
34.0
Apr-16
TOTAL
155.3
* In accordance to A-REIT’s Trust Deed, the Manager is entitled to a divestment fee of 0.5% of the sale price of the Property.
CAPITAL AND RISK MANAGEMENT
As at 31 March 2016, A-REIT’s balance sheet remained healthy
with its aggregate leverage at 37.3%. A-REIT is well-positioned
to seize investment opportunities when they arise.
A-REIT’s weighted average term of debt is 3.4 years as at 31
March 2016 with a weighted average all-in borrowing cost of
2.8% per annum. In addition to fixed rate debt issued, interest
rate swaps are used to manage the interest rate exposure
of its floating rate borrowings. About 71.9% of interest rate
exposure of A-REIT’s borrowing is hedged with a weighted
average term of 3.3 years.
Immediately after 31 March 2016, A-REIT issued S$130.0
million 5-year Notes and exchanged S$14.0 million
Exchangeable Collateralised Securities issued by Ruby Assets
Pte Ltd (ECS) for new Units. Accordingly, pro forma aggregate
leverage, average term of debt and borrowing hedge ratio
further improve to 37.1%, 3.5 years and 75.4% respectively.
During the year, the Manager continued to diversify its funding
sources. A-REIT obtained A$564.3 million secured syndicated
facilities to fund acquisitions of 26 logistics properties in
Australia; and refinanced S$150.0 million and CNY69.0 million
borrowings with unsecured term loans. Including the S$130.0
million 5-year Notes issued on 7 April 2016, A-REIT issued total
S$471.6 million worth of Notes (comprising S$150.0 million
7-year Notes, S$230.0 million 5-year Notes, HKD500.0 million
10-year Notes) under its Medium Term Note Programme.
All the notes were competitively priced and were used to
refinance existing borrowings and to fund new acquisitions.
As at the date of this report, S$286.0 million of S$300.0 million
ECS remains outstanding. ECS holders can exchange their
ECS for new A-REIT Units at an exchange price of S$2.0187
per Unit. Any ECS that are not exchanged will be redeemed
at par on 1 February 2017.
To minimise refinancing risk, the Manager continues to keep a
well-spread debt maturity profile.
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A-REIT ANNUAL REPORT
2015/2016
