THE logistics service provider CWT has moved closer to setting up a real estate investment trust (Reit) by announcing that it will sell and lease back two of its properties.
The buildings are CWT Commodity Hub – the largest warehouse in Singapore valued at $323 million – and the $120 million CWT Cold Hub.
The valuations are based on the leasehold titles of the two properties granted by JTC Corporation, which has given in-principle approval for the sale and lease back arrangements. The lease terms are for five years for each property.
They will form part of Cache Logistics Trust (CLT), the name of the proposed Reit. It aims to list on the Singapore mainboard and make further investments in logistics assets around Asia-Pacific.
Earlier reports quoting a source involved in the transactions suggested the Reit will hold properties worth around $1 billion, with DBS managing the listing. CWT said yesterday that ‘the initial portfolio is envisaged to comprise six high-quality logistics properties (here)’.
Apart from the two buildings cited yesterday, it has four other properties earmarked. They are owned by C&P Holdings, Singapore’s largest privately owned container depot operator.
CWT announced its plans to form a Reit with ARA Asset Management – a locally based property fund manager tied to Hong Kong tycoon Li Ka Shing’s Cheung Kong group – on Jan 14.
Under the proposal, CWT will have a 40 per cent stake in the trust manager with the rest held by ARA. EDB Investments – the investment arm of the Economic Development Board – subscribed to 16 million new CWT shares at 78.8 cents apiece last week. The $12.6 million stake represents 2.7 per cent of the firm’s enlarged capital.
The CLT listing is subject to regulatory approvals by the Monetary Authority of Singapore and SGX. CWT shares closed half a cent down at 93 cents yesterday.
Source: Straits Times, 2 Feb 2010
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